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

a competitive bidding system—both among defense
enterprises and with civilian enterprises. The military
saw the costs of weapon systems sky-rocketing beyond
budget increases between the 1970s and 2000s,
affecting their ability to purchase needed systems—in
the military’s appraisal, partly due to rising sophistication
of weapon systems but also due to lack of competition.
47 A second goal was to centralize procurement
of general use items under GAD, thereby achieving
scale of purchase and savings. 48
Civilian enterprises are winning substantial contracts
and are even beating out other SOEs, including
defense industries—both bellwethers of success. Cases
remain rare, but are on the increase. For instance, the
Delixi Group of Zhejiang bid to provide low voltage
electric apparatuses for Jiuquan rocket-launch base
and the Shenzhou spacecraft. It was the only civilian
enterprise submitting a tender and won over 20 other
SOEs. 49 Also, after a successful competitive bidding
competition, the civilian enterprise, Sanxin Steel Structure
Ltd. Co., was awarded the contract to produce
radio telescope towers, a component of China’s most
advanced deep space ground station and enabling
data transmission for the Chang’e-1 mission. 50
Other less glamorous examples of successful bids
include large quantity computer purchases with reported
savings of 28 percent, refueling ships with savings
of 20 percent, and ship production with cost gains
estimated in the hundreds of millions of yuan. 51 In
2004, savings through centralizing purchases of general
use items are estimated to be 7 percent of funds
spent on these, however, this amounts to a mere 1 percent
of the overall budget for equipment. 52
More broadly, the reform has fallen far short of
expectations. To date, only 20 percent of acquisition
is done through competitive bidding. That does not
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