The PLA at Home and Abroad - Strategic Studies Institute - U.S. Army

duration, and would depend heavily on information
and electronic systems. 13 This more sober assessment
was exacerbated by developments across the Taiwan
Strait, culminating in the 1996 crisis, with a humiliating
denouement for China. 14
The latest phase of major reform began with the
shakeup of the industry in 1998-99 and is characterized
by fiscal, policy, organizational, and enterprise
restructuring. Critically, defense funding was dramatically
raised. The military budget roughly grew an average
of 15 percent per annum from 1994-2009, leading
to a nine-fold increase in the budget. 15 Spending on
equipment and weapons procurement has increased
the most. 16 This portion of the budget was readjusted
from a low of 16 percent early in the 1990s to roughly
one-third, where it stands today. 17 More funding has
also been made available to basic R&D. Defense R&D
likely reflects national figures, which have nearly
quadrupled since 2000 and currently amount to 1.5
percent of GDP. 18 Greater funding within the defense
sector has also been directed toward weapon development
management, innovation, and application of
basic technologies and the talent needed to implement
it. 19 Improved finances are also manifest in the salary
increases of key personnel in the defense sector during
the past decade. 20
The reorganizing of the Commission on Science,
Technology, and Industry for National Defense
(COSTIND) was key as well. The old COSTIND had
nearly total control over defense production planning
from setting goals and priorities, to investment, R&D,
production, and testing. In this pivotal position, it exerted
undue influence over the defense-procurement
process. On the other hand, the purchasing of equipment
was dispersed among several bodies, including
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