The State Administration of Science, Technology and Industry for National Defense of the People's Republic of China (PRC) and the General Armaments Department of the Chinese People's Liberation Army (PLA) recently jointly issued a document entitled the Implementation Guideline of Encouraging and Guiding Private Capital into the Fields of Science, Technology and Industry for National Defense (hereinafter referred to as the Guideline). The Guideline specifies that private capital is attracted and encouraged to enter such fields of science, technology and industry for national defense as scientific research and production of weaponry and equipment, investment and construction of science, technology and industry for national defense, restructuring and reorganization of military industrial enterprises and development of military-civilian dual-use technologies.
The Guideline points out that it is necessary to implement equal treatment for private investors and state-owned military industrial enterprises in such aspects as access, task competition and tax preference and strengthen supervision and administration as well as security and confidentiality, in a bid to ensure the security of state secrets.
In terms of scientific research and production of weaponry and equipment, the Guideline stresses that it is imperative to vigorously carry out competitive equipment procurement and private enterprises are encouraged to participate in the competition of equipment procurement projects or supporting tasks that are not directly involved in national security and military secrets, low in investment, highly optimized for general use and carried out by many qualified manufacturing units in the form of competitive bidding, etc.
As for investment and construction, the Guideline proposes that the investment proportion should not be limited for private capital participating in the investment and construction of decontrolled fields of science, technology and industry for national defense and the filing system is adopted in the process.
In terms of creating a favorable environment, the Guideline points