China is boosting its domestic military sector with stolen technology and R&D investment

China is boosting its domestic military sector with stolen technology and R&D investment
Chinese People’s Liberation Army (PLA) soldiers taking part in military training at Pamir Mountains in Kashgar, northwestern China’s Xinjiang region on Jan. 4, 2021. (STR/AFP via Getty Images)

China is racing to catch up with the United States’ military superiority. According to a recent think tank report, it is doing so by bolstering domestic innovation efforts in tandem with ongoing intellectual property theft efforts.

At the same time, the Chinese Communist Party’s (CCP) military arm is hampered by both the trappings of a socialist command economy and its inability to develop cutting-edge technology on its own, according to a RAND Corporation report (pdf) titled “Defense Acquisition in Russia and China.”

“China’s reliance on intellectual property theft means its weapons are years behind,” according to the June report, “but the Chinese recognize that shortcoming and are investing in and growing organic capabilities through joint ventures and acquisition of foreign technology.”

The report, written for the US Army, outlines how China is shifting away from its traditional model of copying other countries. “Overall, the PLA has overcome many technological barriers and is the clear pacesetter in defense acquisitions for the United States.”

For many years, the Chinese innovation model has been to steal and replicate, which the RAND authors refer to as the “copy-replace model.” Many divisions of the People’s Liberation Army (PLA) are armed with replicas of weapons from other countries.

According to RAND, Chinese aircraft are strikingly similar to their counterparts in the United States and Russia. The American F-35 Lightning II and the similar-looking Chinese J-31 Gyrfalcon are among the call signs.

Another jet, the J-20 Mighty Dragon, resembles the American F-22 Raptor. However, despite the J-20’s rapid development, RAND estimates that China is up to 20 years behind the United States in military aviation.

On the ground, the QBZ-95, the PLA’s domestically produced standard service rifle for the last 25 years, may soon be replaced by a copied model. According to The Firearm Blog, the replacement, unofficially known as the QBZ-191, is a near copy of the Heckler and Koch 416. This rifle looks eerily similar to an AR-15.

According to RAND, the CCP’s “reliance on intellectual property theft for weapon development has helped keep it competitive but has put it several years behind the cutting edge.” As a result, China has increased its efforts in R & D.

Domestic military spending in China has been increasing in recent decades, and its approach to innovation has undergone a paradigm shift in recent years.

According to the report, “Chinese military expenditures have increased tenfold in constant dollars over the last 25 years, reaching an all-time high of $250 billion in 2018.” In comparison, the United States had a $700 billion defense budget the same year.

The takeover of the CCP by Chinese leader Xi Jinping resulted in several systemic changes in the PLA’s weapon development strategy. The military and commercial sectors have become more intertwined since 2016. Military designs are frequently outsourced to civilian, albeit state-owned, firms.

According to Rand, “for a sense of scale, nine of the top 22 highest-grossing defense firms in the world are from the United States, and eight are from China.” Salaries for project managers and engineers in China are also becoming competitive with those in the United States. This serves to entice Chinese nationals studying abroad to return home.

After graduating in 2000, almost all Chinese students began living abroad. By 2016, nearly 65 percent of Chinese students had returned to their home country.

Money and theft will not solve all of China’s development issues. According to the report, “the PLA is still struggling to spur domestic innovation and close the gap on a few glaring technical deficiencies, such as high-end chips, silent submarines, and aircraft engines.”

RAND emphasizes internal impediments resulting from communism’s political structure. According to the report, “even as it strives to overcome these technical challenges, the PLA must address the institutional inefficiencies and barriers related to management and quality assurance that continue to stymie its reform efforts.”

Internal hierarchies in many Chinese businesses are based on length of employment and personal relationships rather than meritocracy. Despite the large number of students returning to the country, many existing Chinese companies, according to RAND, fail to effectively integrate returning talent due to ineffective management practices.

“The design of Chinese defense contracts also does little to encourage transparency and accountability,” according to the report. The contract language is ambiguous, contract winners are guaranteed a share of profits above and beyond costs, and low bidders for contracts are given consolation projects. According to RAND, these remnants of the command economy provide little to no incentive to innovate.


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