China turns to market forces for defence

BEIJING • China said yesterday it would leverage its economy to boost defence capabilities, acknowledging shortcomings with long-held aims to inject more market forces into the development of its military.

President Xi Jinping has set great store on military modernisation, including developing an ocean-going "blue water"navy, stealth jets and other advanced technologies.

Officials have said China needs to put more emphasis on developing its military-industrial complex to ensure powerful armed forces.

China must use the market to optimise military resource allocation and actively direct economic and social sector investment, the State Council, or Cabinet, said in a directive issued by state media.

"Work to resolve and restrict systemic obstacles, structural contradictions and policy problems in the fused development of economic and national defence construction," it said, adding that China would push mixed-ownership reform pilot programmes.

China must deepen civil-military fusion, it said, pointing to problems with "a lag in thinking and shortcomings to top-level plans" and unified administrative efforts.

Beijing's defence budget of 954.35 billion yuan (S$194 billion) announced in March is just a quarter of the US$573 billion (S$777 billion) for the United States, but comes at a time of rising concern over China's intentions in territorial disputes.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 22, 2016, with the headline 'China turns to market forces for defence'. Print Edition | Subscribe