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

vestment. 77 Yet by the end of 2005, only a handful of
small, commercialized subsidiaries, largely producing
spin-off products, could be detected in the stock markets.
The average percentage of assets in the defense
industry in the market at that time was 5 percent. 78
This level is now estimated to be up to 40 percent
in AVIC, and 15 percent in CASC, but it still pales
in comparison to the civilian SOEs, which is over 65
percent. 79 Despite the limited progress, by December
2008, in total they had raised over 118 billion yuan in
capital on the stock market. 80 As lucrative defense assets
emerge in the market, the capital raised could be
phenomenal considering the 11 majors are valued at
over a trillion yuan. 81
Perhaps most significantly, the opening up of the defense
industry to the stock markets offers the potential
to fundamentally alter the way the group corporations
operate and are managed—traditionally, bloated, inefficient,
and laden with insider transactions—through
“corporate restructuring” and shareholder demands
for efficient and transparent management. The CSRC
is responsible for evaluating and ensuring compliance
with reporting measures including ratifying IPOs, valuating
stock offerings and supervising adherence with
public listing requirements. 82 The M&As observed to
date have shown signs that restructuring is positively
affecting efficiency and operation, particularly in rationalizing
the geographically and organizationally
dispersed nature of the defense research and development
infrastructure. As one important example in this
regard, CASC has consolidated a large group of satellite
R&D/production facilities and institutes around
the country under China Spacesat Co Ltd, effectively
reducing duplication, streamlining supply chains, and
improving linkages between design and manufactur-
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