China will allow outside investment -- including foreign investors -- in its defense sector, state media reported yesterday, as it seeks to invigorate the long-protected industry.
Firms producing less-sensitive military equipment and products for broader civil and consumer markets will be allowed to solicit domestic and foreign investors as part of broad plans for shareholding reform in the sector, the Beijing News said.
The paper cited guidelines issued last month.
Defense-related companies will also be encouraged to raise funds on both domestic and overseas capital markets, the report said, citing Sun Qin (孫勤), vice minister of the Commission of Science, Technology, and Industry for National Defense, the sector's regulator.
Shareholding reform in the industry is expected to be completed within "several years," the guidelines said.
The Xinhua news agency reported earlier that the reform plans were aimed at helping weapons makers become more market-oriented while increasing innovation and the competitiveness of the defense industry.
However, key military enterprises that design and produce strategic and other major weapons that involve core state secrets or that have a direct impact on national security should remain solely owned by the state.
China has made clear it plans to continue to strengthen its armed forces despite rising international concern.
Its military spending has been surging in recent years, with this year's budget hitting 350.9 billion yuan (US$46.2 billion), up 17.8 percent from a year earlier.
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