The government is mulling policies to speed up reform of its
secretive military sectors, yet maintain national security, a
senior defense official said.
The new policies will cover market entry, investment, taxation,
and land acquisition, Vice-Minister of the Commission of Science,
Technology and Industry for National Defense Sun Qin said on
Monday.
China pledged to open up its military industries to private
investors - both domestic and foreign - last month.
Weapons' manufacturers will be allowed to raise money through
initial public offerings at home and abroad, according to a
guideline jointly issued by the commission, the State-owned Assets
Supervision and Administration Commission and the National
Development and Reform Commission.
The degree of openness to private capital would depend on the
importance of the weapons a company produced, Sun said.
A few "key military enterprises with national strategic security
concerns and core State secrets" will remain solely in State hands,
Sun said.
The State will remain the majority shareholder in "key military
enterprises producing weapons".
"The country will amend existing policies which restrict the
entry of non-state capital into the military sector, and widen the
community of enterprises eligible to receive certificates for
scientific research and production of military products," Sun
said.
He said investment and tax preferences would be maintained for
those "qualified" reformed firms.
The government has set a goal of completing reform of the
"qualified" weapons' manufacturers "within the next few years" in a
move to modernize the Chinese mainland's military hardware and
upgrade its capabilities and technology, according to the
guideline.
Sun said reformed firms will be put under close supervision to
maintain "national security and social stability".
The reforms will adhere to relevant rules issued by the
State-owned Assets Supervision and Administration Commission. The
commission oversees the reform of State-owned companies.
Shareholders and intermediary agents participating in the reform
will have to adhere to relevant secrecy requirements.
The country reserves the final right to control some reformed
firms "during unusual times" to ensure national security, and the
production of weapons.
(China Daily July 4, 2007)