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China to Encourage the Entry of Private Companies in Weapon and Other Military Equipment Manufacturing

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Published on : Jul 20, 2015

China is planning to lower the entry barriers in order to create avenues for private sector to start manufacturing weapons and other military equipment. 

According to reports, Chinese government is considering to open more segments from within the defense sector to private enterprises and lower the entry threshold for them. This information was revealed by the director of the State Administration of Science, Technology, and Industry for National Defense in China, Xy Dazhe. The body overseas the operations of defense industries in China. 

The China Daily, which is a military owned publication, quoted Xu Dazhe sharing the piece of information at the Expo of First Military and Civilian Industries Integration organized in Beijing. This is a 10-day event which began since the last Thursday. 
Xu Dazhe said at the Expo that the organization will slowly reduce restrictions on private enterprises from venturing in the military equipment industry. He also added that policy makers in China also intend to plan favorable policies to encourage the use of machine parts made by private industries among the State-owned defense contractors. 

It is not today that China has revealed its plans of opening up the weapon and other defense equipment manufacturing segment to private companies. In fact the country has gradually started easing out the barrier to the entry of private players in the defense manufacturing sector since 2005. Today the private firms in China also enjoy the privilege of bidding for PLA contracts after they have obtained viable licenses issued by the government that considers technological capability and confidentiality. 

Almost 1,000 private companies in China already have permission to develop and manufacture military equipment or weapons. Private enterprises already account for almost 40% of the defense equipment contractors in China, as per the information shared by a senior official.