Contents

Preface
I. The Security Situation
II. National Defense Policy
III. Modernization of the People's Liberation Army
IV. Deployment of the Armed Forces
V. National Defense Mobilization and Reserve Force Building
VI. Military Legal System
VII. Science, Technology and Industry for National Defense
VIII. Defense Expenditure
IX. Military Confidence-Building
X. Arms Control and Disarmament

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China has established and is striving to optimize those research and production systems for weaponry and equipment which cater to both military and civilian needs and sustain military potential in civilian capabilities. It furthers reform and development and raises the capacity of research and production in promoting advanced defense-related science, technology and industry.

Reform and Development of Science, Technology and Industry for National Defense

Defense-related industries have actively transformed their development model. Through restructuring, optimizing and upgrading, and by taking energy conservation and emission reduction measures, they have coped effectively with the international financial crisis. A legal and regulatory system has been established to improve the capabilities of defense-related industries as well as the supervision over and management of their key installations and facilities. Defense-related industries have achieved steady and relatively rapid growth.

Defense-related enterprises and institutions are regulated and guided to make use of civilian industrial capabilities and social capital to conduct research into and production of weaponry and equipment. In 2010, based on the Regulations on the Licensing Administration of Weaponry and Equipment Research and Production, the Ministry of Industry and Information Technology and the PLA's General Armaments Department jointly issued the Implementation Measures for the Licensing of Weaponry and Equipment Research and Production to further regulate the participation of different types of economic bodies in scientific research into and production of weaponry and equipment and in tendering for relevant projects. Civilian industrial enterprises licensed for the scientific research into and production of weaponry and equipment now make up two-thirds of the total licensed enterprises and institutions. The Guiding Catalogue of Fields for Social Investment in Defense-related Science, Technology and Industry has been issued to promote diversity in investors in defense-related enterprises.

Improvement of Scientific Research and Production Capabilities for Weaponry and Equipment

Advanced core competence of defense-related industries has been built. Science, technology and industry for national defense have achieved the goals set in the Eleventh Five-Year Plan (2006-2010). A number of high-level research platforms and new equipment production lines have been built. Resources involved in R&D, design and simulation, processing and manufacturing, and experimentation and testing have been further modernized to ensure the fulfillment of research and production tasks, and the realization of mutual promotion and coordinated development between the R&D and production of model weaponry and equipment and the consolidation of fundamental capabilities.

Capabilities in independent innovation have been strengthened. Defense-related enterprises and institutions, institutes for basic research and institutions of higher learning are encouraged to make innovations in defense-related science and technology and to strengthen both basic and applied research. Exploration, innovation and the application of new theories, technologies and processing techniques have been accelerated. The development of advanced industrial technologies has been encouraged. Digital and information technologies have been widely used. The technological level and innovative capability of scientific research into and production of weaponry and equipment have been raised. To create a favorable environment for innovation, incentive policies and appraisal systems for original innovation have been introduced to build a better contingent of creative and talented people and to provide them with the motivation and initiative to produce scientific and technological innovations. Great importance has been given to the filing, application and protection of intellectual property rights related to science, technology and industry for national defense. In 2009, dozens of innovations won National Technology Invention Awards or National Science and Technology Progress Awards.

The basic capabilities of weaponry and equipment research and production have been enhanced. The construction, operation and management of defense-related technological infrastructure have all been reinforced. National defense science and technology labs as well as research and application centers for advanced technologies have been playing a vital role in both basic and applied research. A long-term mechanism for quality control has been established to reinforce quality supervision, resulting in a steady improvement in the overall quality of products. Technological infrastructure for the defense industry, such as standards and measurements, has been established to provide better support capabilities to weaponry and equipment research and production.

Peaceful Use of Defense Industrial Technology

The application of defense-related technologies has been accelerated in line with key fields and projects decided by the state. With breakthroughs in vital technologies and industrialization, burgeoning industries with strategic significance, and other defense-related high-tech industries in the fields of aeronautics and space, electronic information, special technologies and equipment, new energy and high efficiency power, and energy conservation and environmental protection have been developed to foster new economic engines in revitalizing national industries and restructuring new and high-tech industries.

Great importance has been attached to the peaceful use and development of nuclear energy and space technology. The industrial policy of actively exploiting nuclear energy has been formulated and issued, which has effectively secured the growth of the industries of nuclear power, nuclear fuel recycling, and nuclear technology application. Positive progress has been achieved in the export of aerospace products. China has successfully developed and launched a communications satellite for Venezuela and signed agreements or contracts on cooperation in the field of communications satellites with some countries.

Participation in International Exchanges and Cooperation

Cooperation with foreign countries in defense-related science, technology and industry has been conducted on an equal, mutually beneficial, and win-win basis. Cooperation in defense technology with friendly countries has been promoted, and mechanisms for inter-governmental commissions with some friendly countries involving defense industries and technologies have been established. Defense-related enterprises and institutions are encouraged and supported to engage in international exchanges and cooperation. Such defense industrial and technological cooperation as joint R&D, and production and personnel training are conducted with foreign countries.

The Chinese government strictly fulfils its international obligations, commitments and relevant resolutions of the Security Council of the UN on sanctions. In conformity with international conventions and standards, it has established a sound non-proliferation regime at the three levels of government, corporation and export enterprise, taking a prudent attitude towards the export of military products and related technologies. Following the principles of serving the purpose of helping the recipient state enhance its capability for legitimate self-defense, not impairing the peace, security and stability of the relevant region or the world as a whole, and not interfering in the recipient state's internal affairs, China sets up a franchising system for the enterprises permitted to export military products, practices a licensing system for military product export, and strictly abides by its policies and laws on non-proliferation.

Attaching great importance to international cooperation in the field of nuclear energy, the Chinese government has reached inter-governmental agreements with 23 countries on peaceful use of nuclear energy, introduced advanced nuclear energy technologies into China, and provided every possible assistance to developing countries. In April 2009, organized by the International Atomic Energy Agency (IAEA) and hosted by the Chinese government, the International Ministerial Conference on Nuclear Energy in the 21st Century was held in Beijing.

In accordance with the principle of peaceful use of outer space, China has conducted bilateral cooperation and exchanges with Russia, France, Brazil, Ukraine, the United States and the European Space Agency (ESA) in the fields of space technology, space exploration and space science. It supports the work of the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) and Asia-Pacific Space Cooperation Organization (APSCO), and plays an active role in making use of outer space technologies to conduct multilateral cooperation in Earth science research, disaster prevention and reduction, deep space exploration, and space debris mitigation and protection.