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

fairness according to guidelines enforced and ratified
by SASAC and CSRC. The defense industry however
is known for problems such as intra-industry competition
and affiliated transactions, which put minority
shareholders at a disadvantage. 93
In sum, while shareholding reform holds out the
future potential to improve the organization, corporate
structure, and transparency of the defense industry,
currently, little progress has been made and the
evolving trends of consolidation within the industry
do not augur well. Yet, this reform is highly pertinent
to the trends of CMI in the greater access of the defense
industry corporations to market capital, an increasingly
critical factor as China’s need for defense
funding grow.
NATIONAL STRATEGY: GATHERING
MOMENTUM
The current reshaping of institutions and policies
establish the potential to fundamentally change the
relationship between the defense and civilian economies.
But they are only the building blocks. They are
merely improving the environment for reform. The
critical question remains whether a coherent national
strategy exists to translate the long-term goals of CMI
into reality. A comprehensive overview of the contributing
elements is beyond the scope of this writing;
however, a number of broader themes are emerging.
Funding and Management.
Arguably, the most telling of central government
commitment to CMI strategy is the ability to marshal
and effectively manage the state’s resources in service
of this goal. The implementation of CMI—to combine
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