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

ized, hierarchical leadership to direct CMI at levels no
lower than the Central Military Commission (CMC)
and the State Council. This would resemble the U.S.
system which is directed by presidential offices and
congressional committees, with offices throughout the
government and defense establishment to execute it. 38
However, the U.S. system took roughly 10 years to put
in place, and we should not expect China’s messy organizational
oversight, local-central power struggles,
the legacy of a monopolized defense industry, and
conflicting regulatory and policy directives to take
any less time.
INCENTIVE BUILDING
The recent bout of policy reforms arrived in dribbles
and without fanfare begining in 2002, and continues
until the present. Individually, they are almost
indiscernible, but collectively they may be more revolutionary
than those of 1998-99. A number of factors
have led up to their onset. It was clear to the leadership,
both political and military, that the 1998-99 restructuring
of the management and operation over the
defense enterprises were not sufficient to bring China’s
entrenched defense industry up to par with the
global leaders. Military conversion spin-offs remained
the dominant form of dual-use activity, while spinon
and more comprehensive technology diffusion
between civilian and military sectors was generally
anemic and confined to a few narrow fields. Second,
the international trends were clear. After the end of
the cold war, global military powers were decisively
moving toward “composite defense-economic” characteristics
(United States) or already had successful
dual-use economies (Japan) in place. 39 China studied
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