Mil­i­tary, civil­ians must un­leash their joint power

China Daily (Hong Kong) - - VIEWS -

China has to make greater ef­forts to in­te­grate mil­i­tary and civil­ian in­dus­tries, as it will fur­ther boost the econ­omy, strengthen the na­tional de­fense sec­tor, and mark an im­por­tant achieve­ment of the com­pre­hen­sive re­forms over the past five years, re­it­er­ated Pres­i­dent Xi Jin­ping, who is also the chair­man of the Cen­tral Mil­i­tary Com­mis­sion.

The mil­i­tary-civil­ian in­te­gra­tion is an in­evitable choice and ef­fec­tive strat­egy for a ris­ing power to cope with re­source, growth and se­cu­rity is­sues. In March 2015, Xi said the mil­i­tary-civil­ian in­te­gra­tion has been el­e­vated to a na­tional strat­egy. In essence, mil­i­tary and civil­ian in­te­gra­tion sig­ni­fies rea­son­able dis­tri­bu­tion of na­tional re­sources be­tween the econ­omy and de­fense sec­tor. In peace­time, a ma­jor part of the re­sources are in­vested in the econ­omy for the ben­e­fit of the peo­ple, while dur­ing wars more re­sources are di­verted to the de­fense sec­tor.

The mil­i­tary’s com­bat ca­pa­bil­ity con­sists of per­son­nel, weapons, fa­cil­i­ties and equip-

Wash­ing­ton blames Bei­jing for its trade deficit, and crit­i­cizes China’s steel ex­ports, mar­ket en­vi­ron­ment, and re­stric­tions on the en­try of for­eign cap­i­tal into some in­dus­tries. Bei­jing, on the other hand, is un­happy with US re­stric­tions on the ex­port of high-tech­nol­ogy prod­ucts to China, and the stan­dards and lack of trans­parency of Wash­ing­ton’s se­cu­rity re­view mech­a­nism on for­eign in­vest­ment.

Steel over­ca­pac­ity is a global con­cern. Yet the United States im­poses anti-dump­ing and coun­ter­vail­ing mea­sures against Chi­nese steel prod­ucts, with the tar­iff on some items be­ing as high as 500 per­cent, which is noth­ing but trade pro­tec­tion­ism.

Since all these is­sues could not be re­solved at the US-China Com­pre­hen­sive Eco­nomic Di­a­logue in Wash­ing­ton on July 19, the two coun­tries need to deepen com­mu­ni­ca­tion on trade is­sues, in or­der to reach a con­sen­sus on how to ob­jec­tively view the trade im­bal­ance and make co­or­di­nated ment, lo­gis­ti­cal sup­port, in­tel­li­gence, a com­mand sys­tem, mil­i­tary the­o­ries, tech­nolo­gies in­clud­ing in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy, and funds. Some of these re­sources now come from civil­ian en­ter­prises, re­flect­ing the im­por­tance of mil­i­tary-civil­ian in­te­gra­tion to cope with com­pli­cated na­tional se­cu­rity is­sues and im­prove the mil­i­tary’s com­bat ca­pa­bil­i­ties.

In fact, mil­i­tary-civil­ian in­te­gra­tion has made much progress. The 13th Five-Year Plan (2016-20) has laid out 100 ma­jor projects, and 40 of them are re­lated to mil­i­tary-civil­ian in­te­gra­tion. As a re­sult, an in­creas­ing num­ber of pri­vate en­ter­prises are pro­duc­ing mil­i­tary prod­ucts. By the end of 2015, pri­vate en­ter­prises with the li­cense to pro­duce mil­i­tary weapons ac­counted for twothirds of the to­tal en­ter­prises in the sec­tor, and their ac­cu­mu­lated reg­is­tered cap­i­tal was more than 50 trillion yuan ($7.4 trillion). Also, the num­ber

ef­forts to grad­u­ally re­bal­ance bilateral trade.

China can moder­ately in­crease the im­port of US agri­cul­tural prod­ucts, if in re­turn Wash­ing­ton lifts the re­stric­tions on Chi­nese agri­cul­tural prod­ucts. The re­cip­ro­cal ar­range­ment of the 100Day Ac­tion Plan — the US ex­port­ing beef to China and China ex­port­ing chicken to the US — is a good ex­am­ple of how the two sides can strike a mu­tu­ally ben­e­fi­cial deal.

Also, China wants to im­port more US high-tech prod­ucts, for which Wash­ing­ton has to lift the re­stric­tions on the sec­tor as early as pos­si­ble. To cor­rect the im­bal­ance in bilateral trade, China can also in­crease its in­vest­ments in the US, but the US, in re­turn, has to make its in­vest­ment se­cu­rity re­view mech­a­nism more open and trans­par­ent, and re­sume the talks on the bilateral in­vest­ment treaty as soon as pos­si­ble.

More­over, China can con­sider open­ing up its ser­vice sec­tor more ex­pe­di­tiously, and im­port­ing more oil and natu- of in­te­grated mil­i­tary-civil­ian in­dus­trial parks has in­creased from 28 in 2010 to 140 to­day.

Be­sides, emerg­ing strate­gic in­dus­tries have grown rapidly. Last year, in­dus­tries such as new gen­er­a­tion in­for­ma­tion tech­nol­ogy, new en­ergy and new ma­te­ri­als grew at about 10 per­cent.

The trans­fer of in­tel­lec­tual prop­erty rights in de­fense-re­lated science and tech­nol­ogy fields has ac­cel­er­ated. Sev­eral in­dus­trial bases and parks, and in­cu­ba­tors for mil­i­tary-civil­ian in­te­gra­tion have been es­tab­lished in places such as Bei­jing, Tian­jin and Shan­dong prov­ince. The Tianhe su­per­com­puter and Bei­dou nav­i­ga­tion sys­tems are just two of the sci­en­tific achieve­ments that ral gas from the US. In re­turn, how­ever, the US has to cre­ate a fa­vor­able co­op­er­a­tive at­mos­phere.

Huo Jian­guo, a re­searcher at the Cen­ter for China and Glob­al­iza­tion and vice-chair­man of the China So­ci­ety for World Trade Or­ga­ni­za­tion Stud­ies Since the US has had a trade deficit for four decades, the can boost na­tional de­fense as well as eco­nomic growth.

Still, there is a need to fur­ther pro­mote in­te­grated mil­i­tary-civil­ian de­vel­op­ment to cul­ti­vate tal­ents, con­duct sci­en­tific re­search, build fa­cil­i­ties and de­velop equip­ment in or­der to strengthen na­tional de­fense and bol­ster eco­nomic growth. For ex­am­ple, mil­i­tary tal­ents can be cul­ti­vated in non-mil­i­tary col­leges, and the mil­i­tary can cre­ate a fa­vor­able en­vi­ron­ment to at­tract more civil­ian tal­ents. There is also a need to raise mil­i­tary per­son­nel’s salaries and ma­te­rial ben­e­fits.

Be­sides, mil­i­tary en­ter­prises should im­ple­ment deeper re­forms by chang­ing their man­age­ment ap­proach, re­or­ga­niz­ing them­selves, seek­ing merg­ers and ac­qui­si­tions, and open­ing up some ar­eas to the mar­ket. And pri­vate en­ter­prises must seize the op­por­tu­nity to par­tic­i­pate in de­fense-re­lated sci­en­tific re­search and pro­duc­tion. Some reg­u­la­tions still pro­hibit pri­vate en­ter­prises from en­ter­ing cer­tain mil­i­tary man­u­fac­tur­ing fields. But these prob­lems will be grad­u­ally solved, lead­ing to the es­tab­lish­ment of a new mil­i­tary product sys­tem headed by highly-com­pet­i­tive en­ter­prises, prob­lem can­not be solved overnight. More im­por­tantly, urg­ing China to re­duce ex­ports to the US will not re­duce Wash­ing­ton’s trade deficit.

The onus is on the US to take mea­sures to im­prove its sup­ply struc­ture and qual­ity, by loos­en­ing its con­trol on the ex­port of some spe­cial prod­ucts, and in­creas­ing the vol­ume of its en­ergy and re­source ex­ports.

The US also has trade deficits with Ger­many, Mex­ico, in­clud­ing some pri­vate ones, which in turn will make weaponry pur­chase ef­fi­cient, and en­cour­age re­search into and ap­pli­ca­tion of new weapons.

More­over, some mil­i­tary fa­cil­i­ties and ap­pli­ca­tions can be jointly built and shared by the de­fense forces and civil­ians — for in­stance, they can share air­ports, roads, ports, har­bors and lo­gis­tics. Also, con­certed ef­forts must be made to pro­mote the de­vel­op­ment of tech­nolo­gies, prod­ucts, fa­cil­i­ties and equip­ment that can be used by the mil­i­tary as well as civil­ians. For ex­am­ple, the Bei­dou nav­i­ga­tion sys­tem can serve civil­ians and the mil­i­tary, and big air­craft can be used in both civil and mil­i­tary avi­a­tion.

To fur­ther pro­mote mil­i­tarycivil­ian in­te­gra­tion, the gov­ern­ment should strengthen ser­vice plan­ning and es­tab­lish mil­i­tary-civil­ian in­no­va­tion plat­forms. And mil­i­tary and pri­vate en­ter­prises should bet­ter con­nect with each other in or­der to ex­pe­dite the in­te­gra­tion of mil­i­tary and civil­ian fac­tors of pro­duc­tion.

The mil­i­tarycivil­ian in­te­gra­tion is an in­evitable choice ...

The au­thor is a pro­fes­sor at the col­lege of eco­nomics, Ren­min Univer­sity of China. Ja­pan and some other coun­tries. Yet the Trump ad­min­is­tra­tion hasn’t de­cided whether it wants a strong or a weak dol­lar. A strong dol­lar will con­sol­i­date the US’ lead­ing role in the world econ­omy, but also raise its trade deficit. A weak dol­lar, on the other hand, will help boost US ex­ports, but at the same time weaken the eco­nomic sta­tus of the US.

Al­though the US can ex­port a lot more oil and nat­u­ral gas to coun­tries such as China, it

lacks the nec­es­sary in­fra­struc­ture fa­cil­i­ties to do so. For in­stance, its west coast doesn’t have a port that can han­dle the ex­port of nat­u­ral gas. So, it should build such a port.

Hope­fully, US Pres­i­dent Don­ald Trump’s an­tic­i­pated visit to China will help re­solve such is­sues and fa­cil­i­tate the sta­ble de­vel­op­ment of bilateral eco­nomic and trade re­la­tions.

Lyu Xiang, a re­searcher at the Cen­ter for China and Glob­al­iza­tion as well as the Chi­nese Academy of So­cial Sciences The US’ over­all trade deficit is the re­sult of its po­si­tion in the global sup­ply chain, and thus can­not be erased by China. Last year, the com­puter and elec­tron­ics sec­tors’ share in the US’ to­tal trade deficit was 24 per­cent — more than $170 bil­lion in ac­tual terms, of which $144 bil­lion was with China. But US im­ports of com­put­ers and elec­tron­ics from China also in­clude prod­ucts, parts and ser­vices from Ja­pan, the Repub­lic of Korea, Ger­many, France and even the US it­self.

To change its po­si­tion on the sup­ply chain, the US first needs to over­haul its in­dus­trial sec­tor, as his­tory shows us­ing trade poli­cies to solve trade im­bal­ance has never suc­ceeded. Lit­tle won­der the US-China Com­pre­hen­sive Eco­nomic Di­a­logue couldn’t

achieve any break­through in this re­gard.

That the two sides will con­tinue to hold such talks goes with­out say­ing, but the US could feel dis­ap­pointed again if it in­sists on us­ing such di­a­logues to re­solve the trade deficit is­sue.

The World Trade Or­ga­ni­za­tion has pro­cessed 525 trade dis­putes in 22 years, among which 39 were against China and 130 against the US, mostly for vi­o­lat­ing WTO rules, grant­ing un­rea­son­able sub­si­dies, un­fair com­pe­ti­tion, and abuse of trade re­stric­tions.

Ac­cord­ing to the WTO, the US’ trade re­stric­tive mea­sures against the other G20 mem­ber coun­tries in the first five months of this year in­creased by 26 per­cent year-on-year, while sim­i­lar mea­sures taken by the other G20 mem­bers against the US de­clined by 29 per­cent. This makes it ob­vi­ous the US has be­come an ob­sta­cle to fair trade.

Sino-US trade there­fore should fo­cus more on in­vest­ment, tech­nol­ogy, re­search and de­vel­op­ment, fi­nance, ser­vice trade, pro­tec­tion of in­tel­lec­tual prop­erty rights, law, cul­ture, tourism and the joint de­vel­op­ment of other mar­kets, and build­ing a com­pre­hen­sive, sta­ble and mu­tu­ally ben­e­fi­cial mech­a­nism.

He Wei­wen, a re­searcher at the Cen­ter for China and Glob­al­iza­tion, and for­mer com­mer­cial coun­cilor at China’s Con­sulate Gen­er­als in San Fran­cisco and New York

CAI MENG / CHINA DAILY

Wang Baokun

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