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Commission on Science, Technology and National Defense Industry (COSTIND)

Dongguanfang, di'anmenxidajie, Beijing
Zip Code: 100034
Tel: (010) 66058958
Fax: 666738111

No.1 Aimin Street, 
Xichent District, 100034 Beijing 
Tel:(10) 66034714, Fax: 66034714 

The Commission of Science, Technology and Industry for National Defense was organized under the same title in Beijing in March 1998. Subsidiary bureaus are the State Aerospace Bureau and the State Atomic Energy Agency. Subordinated under the State Council, it incorporates the national defense administrative functions of the CSTIND, functions of the National Defense Department of the former State Planning Commission, as well as the government functions undertaken by various military industrial corporations. The commission coordinates with relevant departments of the Central Military Commission to take charge of producing and supplying military equipment, and formulating and implementing military scientific research programs. The commission is responsible for working out development programs and regulations for various military industrial trades and implementing sectoral management.

Beneath the two Central Military Commissions were the Ministry of National Defense and the Commission on Science, Technology and National Defense Industry (COSTIND), which separately took orders from the two Central Military Commissions but had no operational control over the PLA. The COSTIND--formed in August 1982 by merging the National Defense Science and Technology Commission, the State Council's National Defense Industries Office, and Office of the Science, Technology, and Armaments Commission of the party Central Military Commission -- was responsible for military research and development, weapons procurement supervised weapons research and development, coordination of military production of defense industries, control of funding for weapons procurement, and coordination of the defense and civilian economic sectors.

Since the 1950s much of China's research and development effort has been channeled into military work. Military research facilities and factories are reported to have China's best-trained personnel, highest level of technology, and first priority for funding. Although the military sector has been shrouded in secrecy, its work evidently has resulted in the largely independent development of nuclear and thermonuclear weapons, intercontinental ballistic missiles, nuclear submarines and submarine-launched ballistic missiles, and the successful launch and recovery of communications and reconnaissance satellites.

Following the withdrawal of Soviet aid and advisers in 1960, which crippled the defense industry and weapons production for several years, China stressed self-reliance in developing its own weaponry. The acquisition of foreign military technology became a contentious issue at times, particularly in the 1970s, when Maoists stressed complete self-reliance and more moderate leaders wished to import some foreign technology. The signing of an agreement to coproduce Rolls Royce Spey engines in 1975 signaled the resolution of that debate in favor of selective importation. Beginning in 1977, Chinese military delegations traveled abroad, particularly to Western Europe and, in the 1980s, to the United States, to visit Western defense manufacturers and to inspect the state of the art in military equipment. Chinese representatives showed great interest in a wide variety of weapons systems, but they made few purchases of complete weapons systems, concentrating instead on acquisition of selective components, equipment, or technologies and on concluding coproduction agreements.

China's selective approach to acquiring foreign military technology stemmed from the limited funds available for military modernization and the desire of Chinese leaders to avoid dependence on any one supplier. The selective approach also reflected the knowledge that assimilation of foreign technology could present problems because of the low level of Chinese military technology and lack of qualified personnel. Finally, the leadership realized that China's past emphasis on modifying foreign weapons and on reverse engineering had greatly limited China's weapons development capacity. To overcome weapons deficiency in the short run and achieve indigenous military research, development, and production in the long run, China's leaders combined the selective import of weapons and technology with improved technical training of defense personnel and development of the civilian economy.

China primarily was interested in obtaining defensive weapons from abroad to correct the PLA's most critical weaknesses. These weapons and equipment included antitank and antiaircraft missiles, armor-piercing ammunition, helicopters, trucks, jeeps, automobiles, and tank fire-control systems, engines, and turrets for the ground forces; antiship missiles, air defense systems, antisubmarine warfare systems, and electronic countermeasures systems for the Navy; and avionics, including fire control and navigation systems, for the Air Force. Observers opined that the entire military needed improved command, control, communications, and intelligence equipment and computers for command and logistics.

Little information on the military research sector has been made public, and secrecy has been reinforced by isolation of many military research centers in the remote deserts and mountains of China's western regions. The overall level of China's military technology is not high by international standards, and the achievements in nuclear weapons and missiles have apparently resulted from projects featuring concentrated resources, effective coordination of distinct specialties and industries, and firm leadership directed at the achievement of a single, well-defined goal. The style recalls the 1940s Manhattan Project in the United States, and the accomplishments demonstrate the effectiveness of the Soviet-style "big push" mode of organizing research and development.

The military sector has developed in comparative isolation from the civilian economy, and until the 1980s its higher level of skills made little contribution to the national economy. Throughout the 1980s efforts have been made to break down some of the administrative barriers separating the military and civilian research and development systems. The military sector has been relatively privileged, and the spirit of self-reliance has been strong. Nevertheless, the rapid development of electronics and computer applications in the 1970s and 1980s rendered much of China's military industry obsolete. Consequently, pressure for more contact between the military research units and civilian institutes (which, with foreign contact and up-to-date foreign technology, may surpass the technical level of the military institutes) may be generated.

The establishment of the COSTIND was a reform measure designed to break down the barriers between civilian and military research and development and industry. Military science and industry previously had been secretive, segregated, and privileged sectors, having material, financial, and personnel resources superior to those available to the civilian sector. The creation of the COSTIND was one measure by which Chinese leaders hoped to facilitate the transfer of technology between the military and civilian sectors. The COSTIND, in particular through its trading arm, China Xinshidai Corporation, coordinated procurement of foreign technology for military purposes.

In 1987 China adopted a new contractual system for weapons research, development, and production. Previously, the COSTIND controlled procurement funding, reviewed proposals for weapons requirements funneled through the General Staff Department's Equipment Subdepartment, and coordinated with defense industries to produce the needed equipment. Under the new system, the state divided defense research and development funds into three categories: military equipment research, basic and applied sciences research, and unidentified technological services.

This reform was another measure designed to integrate military and civilian industry by placing the military production of defense industries within the framework of the planned-commodity economy. The new system further sought to provide the military with better equipment at a minimum cost, to force the defense industry to upgrade weapons designs and improve production, to improve the management of weapons research and development through state application of economic levers, to promote cooperation between research institutes and factories, and to increase the decision-making powers of the enterprises.

Procurement of weapons and equipment represented 45 percent of the defense budget during the 1967 to 1983 period. This figure included 25 percent for aircraft, 15 percent for ground forces weapons, and about 10 percent each for naval and missile systems. China's military-industrial complex, the third largest in the world, produced a wide variety of weapons, including light arms and ammunition, armor, artillery, combat aircraft, fast-attack craft, frigates, destroyers, conventional and nuclear submarines, electronic equipment, tactical missiles, and ballistic missiles.

With the notable exception of China's indigenously produced nuclear submarines, nuclear missiles, and satellites, most Chinese weaponry was based on Soviet designs of the 1950s and 1960s. Much of this equipment was obsolete or obsolescent, and beginning in the late 1970s China made great efforts to upgrade the equipment by changing indigenous design or by incorporating Western technology. The greatest weaknesses were in conventional arms, precision-guided munitions, electronic warfare, and command, control, communications, and intelligence. China attempted to address these weaknesses by focusing military research on electronics--essential to progress in the previously mentioned areas--and by selectively importing key systems or technologies.

Changes in the structure and responsibilitis of COSTIND were announced by Luo Gan, state councilor and secretary general of the State Council in a speech on the Plan for Institutional Restructuring of the State Council delivered at the First Session of the Ninth National People's Congress on 6 March 1998. The functions of national defense industry of the former COSTIND, the functions of the National Defense Department of the State Planning Commission, and the government functions of the ordnance corporations will all be put under the management of the new COSTIND. The ordnance corporations should be gradually reorganized into enterprise groups. The State Aerospace Bureau and State Atomic Energy Agency will be retained, which will represent the state externally and be the organs under COSTIND. In cooperation with the Central Military Commission, COSTIND will be in charge of production and supply of military equipment as well as drafting and implementation of the scientific research plans. COSTIND will be in charge of drafting the rules, regulations, and development plans of the ordnance industries, exercising management over trade, and drafting plans for transferring military technology to civilian use in coordination with the State Economic and Trade Commission [SETC].

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