Civil-Military Fusion and the PLA’s Pursuit of Dominance in Emerging Technologies

Publication: China Brief Volume: 18 Issue: 6

Recently retired Chinese Vice Premier Zhang Gaoli, former head of the Central Commission for Integrated Military and Civilian Development

China is intensifying its nearly two-decade push to meld together the civil and defense economies through what officials term “civil-military fusion” (军民融合). On March 2, 2018, CCP General Secretary Xi Jinping chaired the third meeting of the recently formed Central Commission for Integrated Military and Civilian Development (CCIMCD), where he emphasized the strategic importance of ‘unifying’ (体化) national power through reducing barriers between the commercial economy and defense industrial base (CCTV, 03/02). Days later, speaking to a delegation from the People’s Liberation Army (PLA) and armed police at the 13th National People’s Congress, Xi called civil-military fusion (CMF) a “prerequisite” for realizing the goal of building a strong military (Xinhua, 03/12) [1].

China’s efforts to become a dominant ‘science and tech superpower’ (科技强国) in technologies like artificial intelligence, quantum communications, robotics and smart manufacturing are well documented (China Brief, August 17, 2017). Less is known about how China plans to use CMF to convert its technological push into a long-term military advantage, in ways that, to a significant degree, are partly modeled on the US. Originally elevated to a national strategy in 2014, CMF has since gained importance as a pillar of China’s military modernization, becoming one of Xi’s signature issues as he attempts to turn the PLA into a 21st century fighting force. China’s leadership evidently sees the opportunity to translate the significant progress that has been made in China’s private hi-tech sector into military gains, through the strategic application of industrial policy. [2] Although the push is, in some ways, similar to previous efforts to leverage the private sector, there are signs that this iteration is both more serious and better resourced than past attempts.

A Blueprint for Dual-Use Superiority

In June 2017, the Chinese Academy of Engineering (CAE) and Tsinghua University held a conference on CMF and the dual-use applications of AI. In front of an audience of prominent AI experts, industry leaders, and military personnel that included Zhang Yulin, the assistant director of CMC Equipment Development Division, the Dean of CAE Zhou Ji declared that, “AI will be the most important dual-use technology for the next ten years” (Science Net, June 26, 2017)

Rather than waiting for emerging technologies like AI to mature before encouraging collaboration with the defense industrial base, China’s leadership is determined to bake CMF into the overall design of emerging sectors through top-level planning. CMF is a prominent component of a number of key government initiatives, including the Next Generation Artificial Intelligence Development Plan (2017), Made in China 2025 (2015), and Promotion of a National IC Industry Development Guidelines (2014). The Next-Generation AI Development Plan, released last June, for instance, named CMF as one of the “six main duties” (六大任务) for AI development and called for establishing an “all-element, multi-domain, highly efficient (全要素、多领域、高效益) new pattern of civil-military integrated development.” The goal is not only to ensure military application develop in tandem with civilian applications, but that the combination of the two domains produces ‘leapfrog development’ (跨越发展).

In practice, this means funding pilots and promoting ‘backbone enterprises’ (骨干企业) that will ensure that emerging industries grow with CMF at its core. The approval process for national-level Made in China 2025 demonstration zones, approved by Ministry of Industry and Information Technology (MIIT), includes support for enterprises involved in CMF (Economic Daily, 03/09). What CMF initiatives the Next Generation AI Development Plan will support is less clear, since the plan is still in its initial phase. In November 2017, Major General and Deputy Chairman of the CMC’s Sci & Tech Committee, Lu Yueguang, was appointed to the Next Generation AI Strategy Advisory Committee, ensuring that the PLA will have a voice in the plan’s implementation.

Follow the Leader

The drive to integrate military and commercial decision-making springs, in part, from the PRC’s close study of the US’s experience cultivating commercial-military ties. State-media often cites data showing that in the United States 85% of the military’s core technology comes from the private sector and 80% of firms that supply the US military also sell commercially (Reference Times, 08/01/2017). In January 2018, a study group tasked with researching CMF legislation at the State Council’s Development Research Center published a document outlining the role of legislation like the Federal Technology Transfer Act of 1986 and Federal Acquisition Reform Act in the development of dual-use industries in the US (State Council, January 9).

The US’s example helps to explain why the PLA views the combination of commercial and military resources in emerging technologies—a majority of which are currently being developed in the private sector—as an imperative, with the PRC private sector’s development of commercial technologies with potential military applications, such as AI, drone swarms, cyber weapons, as key to undercutting the US military’s advantage (Reference Times, 12/20). Assimilating private sector innovation into the defense industrial base, according to several military experts, will result in a “spectacular feast” (饕餮盛宴). (Z-Park Civil-Military Integration Industry Park, 12/05/17).

Recent writing has also highlighted the role of the private sector in the Pentagon’s Third Offset Strategy (PLA Daily, 10/11/2017). Days after Space X successfully launched its newest rocket, the Falcon Heavy, several experts from the China Aerospace Academy of Systems Science and Engineering (CAASSE) wrote, “the lack of utilization of social resources has also become an important issue that restricts the better and faster development of China’s space industry” (ICT Civ-Mil Fusion Magazine, 2/13). Increasing commercial sector involvement through CMF, the authors said, would aid China’s rise as an ‘aerospace superpower’ (航天强国).

PLA Out in Front on Implementation   

Partially in imitation of the US’s example, the PLA plays a large direct role in incubating emerging technology and developing ties with private enterprises and research institutes. In order to find new private sector partners and increase the PLA’s profile in the China’s tech communities like Beijing’s Zhongguancun, the Central Military Commission’s Equipment Development Department has held and participated in a number of “innovation challenges” and dual-use technology competitions (Science Net, 09/16/2017). These events are not unlike the competitions DARPA or the Pentagon’s Defense Innovation Unit Experimental (DIUx) hold in the US, albeit less sophisticated overall.

Because of its scale and institutional background, the PLA has traditionally dealt with large, state-owned enterprises for procurement and R&D needs. It’s clear that the PLA is trying to change that. In October 2017, the PLA Air Force (PLAAF) Logistics Department signed strategic cooperation agreements with and SF Express—one of China’s largest e-commerce outlets and logistic companies, respectively—to create an intelligent logistics system, including the use of transportation UAVs to maintain supply chains. After a successful trial run, which included drills with delivery drones in rural areas of Shaanxi and Yunnan, state-media hailed the partnership as an “innovative specimen of civil-military fusion” (军民融合创新样本) (Caixin, 01/16).

In further demonstration of the PLA’s genuine desire to engage the private sector, in April 2017, the Central Military Commission’s Equipment Development Department opened tenders on more than 2,000 projects to private companies (SCMP, April 20 2017). A month prior, the CMC’s National Defense Intellectual Property Office of the Equipment Development Department announced it would declassify over 3,000 defense patents for private sector use, marking the first time the PLA declassified patents in the thirty years since the PRC military patent system was created [3].

The Strategic Support Force (SSF), the branch of the PLA with primary responsibility for space, electronic, and cyber warfare, has been particularly forward-leaning, especially in R&D. In July 2017, the SSF signed talent and research cooperation agreements with nine research institutions and laboratories, including the Harbin Institute of Technology and Shanghai Jiaotong University, two of the country’s leading research universities (Xinhua, July 2017). The SSF also has informal, largely unreported ties with private enterprises. Last March, the PLA Daily reported that a branch of the SSF responsible for testing software related to combat capabilities had spent time inside an unnamed software company, inspecting the company’s software code and reviewing internal R&D processes (PLA Daily, 03/13/2017).

Same Old Song or Something New?

Analysts evaluating these efforts should keep in mind the fact that China’s previous attempts to invigorate its sclerotic state-owned defense industrial base through market forces met with only limited success. China’s leaders have been trying to implement some iteration of civil-military fusion since Deng Xiaoping. But there are reasons to believe this time is different.

First, Xi Jinping has consolidated control over the CMC, placing loyalists in key positions to push forward reform of the defense industrial base. Xi has also centralized control over the implementation of CMF through the recently established CCIMCD. In a sign of the commission’s significance, last year Xi appointed then member of the Central Politburo and Vice Premier Zhang Gaoli (张高丽) to run the commission’s daily affairs, a role usually reserved for a lower ranking official (SCMP, 06/21/2017). [4] The combination of these two developments means President Xi will have more power to push through reforms of the defense industrial base than any past Chinese leader

Second, the inclusion of CMF in major strategic initiatives like Made in China 2025 and the Next Generation AI Development Plan all but guarantees high-visibility and financial support for enterprises working on dual-use technology of interest to the PLA. Analysts need only look to successful Chinese ‘national champions’ to appreciate the powerful nexus between commercial technology and government power. Companies like Huawei and ZTE stand out in the telecommunication space, as do with Hikvision and a handful of rising AI companies like iFlytek in the surveillance space. In both cases, these enterprises succeeded in large part because they offered a private sector solution to a Chinese government need and in exchange received lucrative government contracts and valuable non-financial contributions like data or technology and patents.

Xi’s drive to fuse technological and military development means more enterprises of this mold will likely emerge in the near future, though this time to support the PLA’s pursuit of dominance in emerging technologies. Whether Xi can open private emerging technology sectors to the PLA remains to be seen, though the effort has the potential to energize Xi’s attempt to turn the PLA into a hi-tech, modern fighting force.