Chinese White Paper

IV. Peaceful Uses for Military Industrial Technologies

Beginning at the end of the 1970s, China began a planned and comprehensive transfer of defence technologies to civilian use. This transfer is part of the nation's development strategy and will not only promote national economic development but also help to consolidate China's achievements in arms control and disarmament.

During the course of this transfer, China has effected a major readjustment in military products research and productlon capacity, converting two thirds to serving economic construction. In addition, it has reformed the management system and the industrial and product structures of the defence industry, putting its accomplishments in defence technologies to civilian use.

In 1989, the central government established a "civilian applications of military technology liason group" comprised of the State Planning Commission, the State Scientific and Technological Commission and the Commission of Science, Technology and Industry for National Defence. In provinces and municipalities with concentrations of defence industries, leading groups have been established to coordinate the transfer from military to civilian use, strengthening organization in the organic inclusion of such transfers in national, regional and industrial development plans. Today, the government departments formerly in charge of military production have already been changed into general corporations within their respective trades and, in accordance with the principles of the socialist market economy, will step by step develop into economic entities engaging in research, production and business.

During the Sixth (1981-1985) and Seventh (1986-1990) Five-Year plans for economic and social development, China invested approximately four billion yuan in projects aimed at effecting the transfer. During the

Eighth Five-Year Plan (1991-1995), an additional more than ten billion yuan has been invested. The military industrial enterprises enjoy the same series of preferential policies and reform measures the central government offers for facilitating the operation of enterprises and follow the contract responsibility system. As is stipulated in their contracts, these enterprises will surrender a portion of their profits to the government in addition to taxes. The remaining profits produced by civilian goods will be mostly used to boost production of such goods and improve the lives of those working for the enterprises.

Transforming China's defence industry gradually from its former incarnation as a monolithic producer of military products to today's diversified producer of products for military and civilian consumers has ensured that the needs of peacetime national defence construction are met, while at the same time producing high-quality industrial and consumer goods for society at large, thus playing an important role in national economic construction. As a result of technical transformation and new construction under the direction of the national industrial policy, approximately 450 production lines are now operating in the defence industry at a certain economic scale producing civilian consumer goods. The output value of civilian consumer goods produced by defence industry departments has been increasing 20 percent per annum and in 1994 represented approximately 80 percent of the total output value of such departments as opposed to 8 percent in 1979.

Today, such enterprises have the capacity to produce more than 15,000 products for civilian use in over 50 categories. Products include those used in telecommunications, energy resources, transportation, textiles and other light industries, medicine and health, and engineering and building industries. Outputs of some products have made a substantial contribution to the nation's total, for example automobiles (9 percent), motorcycles (60 percent), freight trains (26 percent) and coal excavation equipment (24 percent). In addition, these enterprises have used military facilities and technology to bring many products and projects from the drawing board to production including the Yun-5, Yun-7, Yun-8 and Yun-12 civil aircraft, the MD-82 and MD-90 large passenger airplanes (produced in cooperation with a foreign partner), the Galaxy-II supercomputer capable of handling 1 billion operations per second and its

application software, the 300,000-KW Qinshan Nuclear Power Station, shuttle oil tankers, multi-function container ships, large air-cooled container ships and other new and hi-tech products. Between 1984 and 1994, China launched 11 satellites for civilian applications. Newly launched communications satellites have increased satellite television coverage in China to 82 percent. The meteorological satellite system has brought increased accuracy to weather forecasting, substantially rlducing economic losses due to natural calamities. Satellite remote sensing technology has produced great economic benefits.

China has established a centre for the application of the national defence technologies and a network to disseminate products and information in order to better convert such technologies to civilian use in a planned way. In the last dozen or so years, more than 2,500 defence technologies have been released for civilian use, greatly promoting technological progress and development in relevant fields.

The defence industry has cooperated extensively with foreign partners in developing products for civilian use.By 1994, over 300 such joint ventures had been established in China.

China's efforts to benefit mankind through military technology have drawn the attention of the international community. The seminars on the transfer of military technology to civilian use jointly held by China and the United Nations in Beijing and in Hong Kong received positive worldwide response. The declaration on such transfers issued by the 1993 Hong Kong seminar stated that world peace and sustained economic deveropment are the common wish of all the world's people; disarmament and peace are complementary, and the transfer of military technology to civilian use is an indispensable link in the chain of promotion of disarmament, and the resulting promotion of peace and development.

The transfer of military technology to civilian use has contributed to national economic construction in China anal. moreover provided various countries in the world with successful experience for such conversion in peacetime.

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