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

in Zhejiang. This province holds the nation’s most
robust nonstate sector—accounting for 90 percent of
its GDP—and is particularly strong in manufacturing.
Zhejiang does not have a legacy defense industry,
yet it has been hugely successful in attracting
key defense production contracts. 110 The province is
currently establishing 16 CMI industry bases, has set
up research institutes and joint ventures, and has 81
enterprises providing hardware for the military ranging
from clothes to large military aircraft, unmanned
aerial vehicles (UAVs) and electronic components. 111
This arrangement is a marriage between private capital
(Wenzhou alone has 600 billion yuan in investment
capital) and military demand.
A third emerging model is the introduction of CMI
activity into zones of established economic and industrial
excellence. In this environment, the military is far
more open to working closely with the civilian sector
in exchange for substantial technological payoff. This
model is dominant in the rapidly developing IT industry,
principally located in the three main “information
technology clusters”: Pearl River Delta, Yangtze River
Delta, and the Bohai Rim. With the military’s current
emphasis on information warfare, the interest in the
civilian IT sector is growing on a large scale.
Despite having deep connections with many of
China’s IT leaders, such as Langchao, Zhongxing,
Legend, Huawei, and Hai’er—with a substantial
rise in the military’s level of technology to show for
it—the defense industry’s integration with the bulk
of China’s civilian IT sector remains circumscribed.
Shenzhen is illustrative here. As the nation’s number
one IT economy, Shenzhen makes up one-sixth of the
national output. 112 Yet, less than 2 percent of Shenzhen’s
IT output has military value. Thus, in July 2009,
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