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

70. These two regulations have been termed the “two
guides,” “关于非公有制经济参与国防科技工业建设的指导意见”
(“Guide of Non-state Economy participates in Defense S&T Industry”),
COSTIND in 2007, available from www.china.com.cn/policy/txt/2007-03/01/content_7888427.htm;
“关于推进军工企业股份制
改造的指导意见” (“Guide of Promoting Share-holding reform in
Defense Industry”), jointly published by COSTIND, NDRC and
SASAC, 2007, available from law.laweach.com/rule_12267_1.html.
71. The full name is “首次公开发行股票并上市管理办法”
(“Administration of Initial Public Offering and Listing of Shares
Procedures”), CSRC, May 2006, available from www.csrc.gov.cn/
n575458/n870280/n4240338/10305328.html.
72. Asset injection actually began to appear following the
State Council Opinions and before the 2007 COSTIND document.
See Aerospace Changfeng injection of assets in 2005, as in Figure
1.
73. After defense assets were injected into public listed companies,
public profit rate of these companies increased. For example,
the profit rate of China North Optical-Electric, Zhongbin Guangdian,
increased 38 percent in first quarter of 2009 after defense
assets were injected in 2008. Meanwhile, the average profit rate of
public listed companies was around 5 percent. Public quarter report
of China North Optical-Electric Company Investors of stock
markets also welcomed those stocks including defense assets.
For example, during 1 week of August 2009, the value of whole
stock markets in Shanghai and Shenzhen decreased 4.7 percent.
Meanwhile, prices of 20 defense stocks increased over 20 percent.
Among these 20, the rising prices of 15 of them were driven by the
anticipation of M&A or as defense asset injection. Chen Cai (陈
才), “中国军工前线报告:资本运作势不可挡” (“Report on China’s
Defense Frontier: An Onrush of Operating Capital”), 东方早报
(Dong Fang Daily), August 29, 2009.
74. Wu Fenglai (吴风来), (a senior official of COSTIND 国防
科工委体制改革司司长), “积极稳妥推进军工企业产权制度改革”
(“Promote Property Right Reform for Defense Enterprise”), 中国
证券报 (China Securities Newspaper), December 25, 2007.
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