China should open up military industry to make breakthroughs in technology

China has announced it will raise its defense budget by around 7 percent this year, a figure that is much lower than expected. The country’s expenditure for military purposes should perhaps be further increased, with the extra funds used to develop sophisticated weapons and core military technologies.

It’s understandable that international competition in this regard has become increasingly intense because breakthroughs made in the research and development of key military technologies are the backbone of not only national military strength but also some high- tech industries.

It is urgent for China to boost the development of engine technology for military drones, satellite navigation and positioning, long- range radar detection, ballistic missile defense and some other military technologies. The country is now aware that core technologies can only come through independent innovation, not imitating other countries. Additionally, the public’s reaction to the lower- than- expected military budget shows that there is a great degree of collective tolerance for faster growth in defense spending, which could create space for China to ex- pand its budget on defense research programs.

China’s defense and hightech industries would both benefit from research breakthroughs. Its global navigation satellite system, known as Compass, is one of the flagships of the business applications efforts. The country’s increasing spending on defense research is likely to accelerate Compass’ commercial viability compared with the US Global Positioning System.

China is currently in a transitional period as its labor cost advantage is shrinking, thus the “world factory” is pushing forward the development of high- tech industries to main- tain momentum for economic growth. Increasing China’s spending on defense research could serve as an important step toward promoting economic upgrading and boosting its competitiveness.

Many breakthroughs made by the US in the research and development of key technologies, which laid the foundation for the country’s leading status in the global economy, were achieved by military- related organizations. The US’ experience in civil- military integration is worth China’s consideration. While stepping up investment to spur development of core military technologies, China needs to lift barriers regarding civilian use of military technologies.

China needs to establish an effective mechanism as well as improve the intellectual property system to boost the transfer of military technology between State- owned military enterprises and high- tech private companies. Additionally, private enterprises should be allowed to further participate in China’ military industry.