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Defence >
China Defence and Security Report Q1 2010
Management Report
Published: January 2010
Pages: For full details, please email keithw@cmsinfo.com
Tables: For full details, please email keithw@cmsinfo.com
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Research from: Business Monitor International
Sector: Defence
China strives to be independent in armament production and is one of very few developing countries to produce the full range of military equipment. However, it is a highly complex operating environment, economically and politically, with numerous factors affecting production. Despite this, China’s real GDP continued its growth trend through 2009. We expect real output to expand by 8.8% in 2010. However, 2010 is likely to see a drop in the inflation rate as commodity prices remain lower in the general economic gloom.
The country’s political pressures continue to grow. The threat of further violence remains as citizens have no outlet to speak under one-party rule. The violent riot that took place in the province of Xinjiang in July 2009 has once again underscored the rising threat of political instability in China. Political upheaval on a dramatic scale is a possibility - while the country’s GDP growth was 10% and upwards, citizens basked in the benefits and largely overlooked the Chinese Community Party (CCP)’s more negative attributes.
We expect a change at some point. China has developed an enormous defence industry, with approximately 2.5mn to 3mn employees engaged in top-tier enterprises. Major reforms have been undertaken since a change in policy in the 1980s. There is now a bid to ‘convert’ the monolithic, state-run military-industrial complex into a competitive, modern entity by producing civilian products through the defence industry. The conversion is intended to improve the efficiency of the industry and make use of redundant facilities, as well as aiding China’s military modernisation programme. The Commission on Science Industry and Technology for National Defence (COSTIND) has stated that there are 450 defence production lines now producing civilian goods.
We expect a change at some point. China has developed an enormous defence industry, with approximately 2.5mn to 3mn employees engaged in top-tier enterprises. Major reforms have been undertaken since a change in policy in the 1980s. There is now a bid to ‘convert’ the monolithic, state-run military-industrial complex into a competitive, modern entity by producing civilian products through the defence industry. The conversion is intended to improve the efficiency of the industry and make use of redundant facilities, as well as aiding China’s military modernisation programme. The Commission on Science Industry and Technology for National Defence (COSTIND) has stated that there are 450 defence production lines now producing civilian goods.