China says it will open its state-run military industries to private and foreign-backed suppliers beginning next month, but the most sensitive weapons programs will stay under tight government control.
The announcement comes amid a multibillion-dollar modernization effort meant in part to extend China's military power beyond its shores and back up frequent threats to attack rival Taiwan.
Private companies will be allowed to supply "subsystems and special auxiliary products," the official Xinhua News Agency said on Friday, citing the Commission of Science, Technology and Industry for National Defense.
Production of "core technology and equipment" will remain under "tight state control," Xinhua said. It said the new regulations will take effect on June 15.
The report didn't give any details of which weapons or equipment programs might be open to private or foreign-backed suppliers or how they would be picked.
"It means if they meet certain standards, including technological level and financial strength, private and foreign-funded companies face no policy barriers to entering business in the second category," Liu Dongkui, director of the commission's economic coordination department, was quoted as saying.
Liu said the move is meant to "help to standardize the weapon development and production industry, promote moderate and orderly competition and improve the level of the national defense industry."
China's military is the world's biggest, but its technology lags far behind that of the US and other governments.
Leaders of the 2.5 million-member People's Liberation Army have talked since the mid-1990s about possibly allowing a foreign or private role in China's weapons industry in order to improve its technology.
Chinese commanders were jolted into action after seeing the devastating success of US high-tech weapons during the first Gulf War and the NATO campaign against Yugoslavia.
China has spent heavily on trying to acquire submarines, fighter jets, air-defense systems and other weapons that would be needed to carry out a campaign against Taiwan, the self-ruled nation that Beijing claims as its own territory.
So far, its most advanced weapons have been bought from Russia, but Beijing is eager to produce its own high-tech arms.
Private businesses are among the candidates for about 300 weapons development and production licenses that the government plans to issue in the second half of this year, Xinhua said.
"But there's no fixed link between a license and production orders," Liu was quoted as saying. "Obtaining a license does not guarantee a company production orders."
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