Chinese Special Weapons Agencies

Inheriting a Soviet-style state-owned economy, the development of Chinese government and economic institutions has been closely linked since the founding of the People's Republic in 1949. Until recently it was effectively impossible to discuss one without the other, as economic and political institutions were effectively one and the same. In recent years, however, distinctions between governmental agencies and industrial enterprises have become increasingly pronounced.

Since 1978, China has been experiencing a period of fundamental economic restructuring, involving a gradual transition from a planned economy to a socialist market economy. The Chinese economy has been gradually integrating itself into the global economic system, with changes undertaken in the following:

• the structure of ownership through the introduction of individual, private and foreign capital ownership,
• economic operations through the combination of planning and market mechanisms,
• the decentralisation of decision-making.

The ultimate target of economic restructuring is the establishment of a socialist market economy by the end of this century, through, inter alia, the development of markets, a modern enterprise system, and comprehensive reforms of the financial, tax, banking, investment and planning systems.

China has a large, well-established infrastructure for the development and production of ballistic missiles. The China Aerospace Corporation (CASC) and its subordinate development, production and test facilities are responsible for ballistic missile production, and the China National Nuclear Corporation is responsible for nuclear weapons activities.

Large-scale Soviet aid in modernizing the PLA, which began in the fall of 1951, took the form of weapons and equipment, assistance in building China's defense industry, and the loan of advisers, primarily technical ones. Mostly during the Korean War years, the Soviet Union supplied infantry weapons, artillery, armor, trucks, fighter aircraft, bombers, submarines, destroyers, and gunboats. Soviet advisers assisted primarily in developing a defense industry set up along Soviet organizational lines. Aircraft and ordnance factories and shipbuilding facilities were constructed and by the late 1950s were producing a wide variety of Soviet design military equipment.

Because the Soviet Union would not provide China with its most modern equipment, most of the weapons were outdated and lacked an offensive capability.

In 1958 the Communist Part of China launched the Great Leap Forward campaign under the new "General Line for Socialist Construction." The Great Leap Forward was aimed at accomplishing the economic and technical development of the country at a vastly faster pace and with greater results. The Great Leap Forward was an economic failure. In early 1959, amid signs of rising popular restiveness, the CCP admitted that the favorable production report for 1958 had been exaggerated.

Chinese dissatisfaction with the Soviet refusal to supply China with nuclear bomb blueprints contributed to the withdrawal of Soviet advisers in 1960. The ascension of Lin Biao and the complete withdrawal of Soviet assistance and advisers in 1960 marked a new stage in military development. The Soviet withdrawal disrupted the defense industry and weapons production, particularly crippling the aircraft industry. Although the military purchased some foreign technology in the 1960s, it was forced to stress self-reliance in weapons production.

The PLA played a complex political role during the Cultural Revolution. From 1966 to 1968, military training, conscription and demobilization, and political education virtually ceased as the PLA was ordered first to help promote the Cultural Revolution and then to reestablish order and authority.

In 1969 Lin Biao launched an extensive "war preparations" campaign; military training was resumed, and military procurement, which had suffered in the first years of the Cultural Revolution, rose dramatically. Military preparedness was further advanced along China's frontiers and particularly the Sino-Soviet border when the thirteen military regions were reorganized into eleven in 1970.

The PLA emerged from the more violent phase of the Cultural Revolution deeply involved in civilian politics and administration. PLA units did not withdraw fully from these duties until 1974. Following the sudden death of Lin Biao in 1971, the military began to disengage from politics, and civilian control over the PLA was reasserted.

Along with the reassertion of civilian control over the military and the return to military duties came a shift of resources away from the defense sector. Defense procurement dropped by 20 percent in 1971 and shifted from aircraft production and intercontinental ballistic missile development to the modernization of the ground forces and medium-range ballistic missile and intermediate-range ballistic missile development.

By the mid-1970s concerns among Chinese leaders about military weakness, especially vis-à-vis the Soviet Union, resulted in a decision to modernize the PLA. Following Premier Zhou Enlai's January 1975 proclamation of the Four Modernizations as national policy, the military modernization program, codified in Central Directive No. 18 of 1975, instructed the military to withdraw from politics and to concentrate on military training and other defense matters. Factional struggles between party moderates and radicals in 1975 and 1976, however, led to the dismissal of Deng from all his posts and the delay of military modernization until after the death of Mao Zedong. Within a month of Mao's death, military leaders headed by Minister of National Defense Ye Jianying cooperated with party chairman Hua Guofeng to arrest the Gang of Four, thus ending a decade of radical politics.

The Chinese leadership resumed the military modernization program in early 1977, but the re-ordering of priorities in the Four Modernizations relegated national defense modernization from third to fourth place (following agriculture, industry, and science and technology). In July 1977, with the backing of moderate military leaders, Deng Xiaoping reassumed his position as PLA chief of general staff as well as his other party and state posts. Deng vigorously promoted military modernization, the further disengagement of the military from politics, and the shift in national priorities to economic development at the expense of defense.

In 1977-78 military and civilian leaders debated whether the military or the civilian economy should receive priority in allocating resources for the Four Modernizations. The military hoped for additional resources to promote its own modernization, while civilian leaders stressed the overall, balanced development of the economy, including civilian industry and science and technology. By arguing that a rapid military buildup would hinder the economy and harm the defense industrial base, civilian leaders convinced the PLA to accept the relegation of national defense to last place in the Four Modernizations. The defense budget accordingly was reduced. Nonetheless, the Chinese military and civilian leadership remained firmly committed to military modernization.

The PRC's top priority through the early 1980s remained the development of its military capabilities. Commercial development was slighted as the best available Chinese resources were directed toward the development of the country's defense industries. With the rise of Deng Xiaoping, however, the Chinese shifted their focus toward a more broad-based industrial-development program.