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Ministry of Ordnance Industry
[5th Ministry of Machine-Building]

Beginning in 1978, Chinese leaders set out to transform the defense industries, which had a huge excess capacity and were criticized for having a "golden rice bowl" (rich but always begging for more). To utilize this excess capacity better and to break down the barriers between military and civilian industry, the machine-building ministries were reorganized, and civilians were appointed to manage them.

In late 1978 China initiated a policy of integrating civilian and military industry more closely in order to promote overall civilian economic development. This policy entailed civilianizing the machine-building ministries to make the defense industry more responsive to civilian control and needs; increasing defense industry production of civilian goods, particularly consumer goods; and transferring technology from the more advanced defense sector to the civilian sector of the economy. Production of civilian goods totaled 6.9 percent of total defense industry output in 1975. In 1980 it rose to 18 percent, and by 1985 it had jumped to 41.8 percent of total output.

The large excess capacity of the defense industry, resulting from declining orders from the PLA, made possible the rapid growth in civilian output. The defense industry manufactured a wide variety of goods for civilian use, including motor vehicles, optical equipment, television sets, electrical appliances, pharmaceuticals, and medical instruments and prostheses. Many of these products were consumer goods in high demand. For example, in 1985 the Ministry of Ordnance Industry manufactured 500,000 motorcycles, representing two-thirds of total motorcycle output, as well as 250,000 cameras, 450,000 bicycles, and 100,000 refrigerators.

In 1986 the Ministry of Machine Building, which produced civilian heavy machinery and industrial equipment, and the Ministry of Ordnance Industry were consolidated into the new State Machine-Building Industry Commission as a way to strengthen the unified management of the national machine-building and weapons enterprises. In 1987 little information was available about this new commission or its relationship to the NDSTIC or to the State Economic Commission, whose Defense Bureau coordinated the civilian production of the defense industry. Further changes in defense industry structure occurred in 1986 and 1987, when inland defense enterprises were either relocated closer to transportation links or cities, closed down, or transferred to local civilian control and production.

Zou Jiahua, who retained his vice-premiership at the National People's Congress in March 1993, held a series of positions in the defense industry. Zou was appointed Minister of Ordnance in 1985; when his Ministry was merged with the Ministry of Machine-Building Industry in 1986 to form the State Machine-Building Industry Commission, he was named minister of the new organization. Zou has been a member of the CCP Central Committee since 1985. He was Minister of Machine-Building and Electronics Industry from 1988 until 1989, when he was named Minister of the State Planning Commission. He gave up that post in March 1993.

Liang Wengen, China's richest man and chairman of the Hunan-based heavy machinery producer Sany Group, looks set to become the first private entrepreneur to enter the Central Committee of the Communist Party of China (CPC), media reports said on 2011-09-27. Both Liang and Tang Xiuguo, president of Sany, confirmed that the Organization Department of the CPC Central Committee had completed the evaluation of Liang.

Liang was born into a poor family in a mountain village in Lianyuan county, Hunan. His family made their living by making bamboo handicrafts. In the late 1970s, Liang enrolled in the Central South University to study metallic materials. Liang graduated as a metal material major from Central South University in 1983. Upon his graduation, he worked for the Hongyuan Machinery Factory, a state-owned factory affiliated with the former Ministry of Ordnance Industry.

After a years toil, Liang quit from the factory, giving up the opportunity to be a cadre, a social status revered by his parental generation, and started his own business. His first venture, selling a number of sheep, ended in failure, as did his second and third business plans. Although he faced one disappointment after another, Liang did not give up. In 1986, his persistence paid off. A factory ordered 105 bronze welding fluxes from him, so that Liang and his partners received 8,000 yuan (about US$1,250) as their first profit.

He founded Sany in 1987 after leaving the ministry. Established in 1989, Sany is the sixth-largest heavy equipment manufacturer in the world. He became a Party member in 2004, shortly after his company became listed and his fortune grew massively.

Both the Hurun Report and Forbes listed Liang, 57, as the richest Chinese person in 2011 with a wealth of about $10 billion. A number of renowned businessmen, such as Haier CEO Zhang Ruimin and Chairman of Sinopec Li Yi, have been accepted by the Party leadership. But those companies are either State-owned or connected with the CPC, whereas Liang would be the first person from the private sector.

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Page last modified: 11-05-2014 18:45:53 ZULU