- A
- B
- C
- D
- E
- F
China’s GI ranking in Band E places it in the “very high” risk of corruption category for corruption in the defence and security sector. China’s highest risk area is Operations (Band F), followed by Financial, Political, and Procurement. The domination of the state by the Chinese Communist Party and a culture of censorship restrict independent oversight of institutions. To reduce corruption risk and to build integrity, security sector reforms are urgently needed across the following areas:
Increase transparency and enhance independent oversight of institutions
Only highly aggregated figures on defence spending are available, with special budgets covering important items like strategic forces, R&D, and the military component of space exploration remaining hidden from view. China should publish more accurate information about expenditure, and allow greater space for informed public discussion over China’s defence policy and strategy.
China’s highest score was found to be in personnel management (Band C). This is largely due to the launch of a five-year plan to eliminate corruption in the People’s Liberation Army which included anti-corruption campaigns, investigations, and public commitments to fight corruption by senior staff. China should look at options for institutionalising mechanisms to hold military elites to account, including greater independence and professionalism of judicial and audit institutions. The change in reporting structure of the PLA Auditing Unit is a positive step in this direction, but public confidence would be greatly enhanced if regular detailed audits were undertaken and the findings published openly. The PLA should also be removed from ownership of commercial enterprises to reduce the risk of conflicts of interest.
Is there formal provision for effective and independent legislative scrutiny of defence policy?
Constitution of the PRC, articles 62 par 6, 67 par 6, 92
Jiang Jinsong, The National People's Congress of China, (Beijing: FL Press, 2003): 137-140
James Mulvenon, &quoute;Your Guess Is As Good As Mine: PLA Budgets, Proposals, and Discussions at the Second Session of the 10th National People's Congress&quoute;, Hoover Foundation, China Leadership Monitor, No.11 (2004)
Sun Zhi, Experts urge Chinese Legislature to form defence committee&quoute;, Ta Kung Pao newspaper, December 20, 2007
Michael Kiselycznyk and Phillip C. Saunders &quoute;Civil-Military Relations in China: Assessing the PLA's Role in Elite Politics&quoute; Institute for National Strategic Studies (2010), http://www.ndu.edu/press/lib/pdf/china-perspectives/ChinaPerspectives-2.pdf
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The diplomat, March 08, 2014
National People's Congress website, http://www.npc.gov.cn
2014 NPC and CPPCC sessions website, http://www.news.cn/politics/2014lh/
2015 NPC and CPPCC sessions website, http://www.news.cn/politics/2015lh/
Yun Sun, Chinese National Security Decision-making: Processes and Challenges; Alice, Miller, The CCP Central Committee’s Leading Small Groups, 2008
Opinion: Agree with Comments
Comment: Although I fully agree with the lack of structural means to ensure effective control of the NPC over defence matters, from the previous comment it seems that such function is exclusive jurisdiction of the military - in the form of the CMC.
However, it is generally agreed that information about the national security decision-making process is largely absent. Many scholars believe that civilian control over the military is in place, and that decisions concerning defence policy are taken at the level of the Party's Politburo Standing Committee, and more specifically by the National Security Leading Group (see: Yun Sun, Chinese National Security Decision-making: Processes and Challenges; Alice, Miller, The CCP Central Committee’s Leading Small Groups, 2008).
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the country have an identifiable and effective parliamentary defence and security committee (or similar such organisation) to exercise oversight?
China's National People's Congress (NPC) does not have an identifiable and effective parliamentary defence and security committee. The Central Military Committee (CMC), the organ maintaining the CCP's leadership over the PLA, has the exclusive right for overseeing defence policy.
There has been no change in this respect during the 2014 and 2015 annual sessions of the NPC and there are no official public discussions regarding the future establishment of a relevant committee.
National People's Congress website, http://www.npc.gov.cn
2014 NPC and CPPCC sessions website, http://www.news.cn/politics/2014lh/
2015 NPC and CPPCC sessions website, http://www.news.cn/politics/2015lh/
Constitution of the PRC, articles 62 par 6, 67 par 6, 92, http://www.npc.gov.cn/englishnpc/Constitution/node_2825.htm
James Mulvenon, &quoute;Your Guess Is As Good As Mine: PLA Budgets, Proposals, and Discussions at the Second Session of the 10th National People's Congress&quoute;, Hoover Foundation, China Leadership Monitor, No.11 (2004)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is the country's national defence policy debated and publicly available?
China's national defence policy is periodically made available publicly through the publication of White Papers (7 Papers since 1998). These documents set out the official understanding of China's security environment, its defence strategy and basic budget structure. However, this cannot be said to be more than in abbreviated form - for example there is little mention of maritime disputes or information that would enable an informed public discussion of China's policy towards this issue.
Specialised publications and portals such as the PLA Daily newspaper and the Ministry of Defence online portal provide additional (officially sanctioned) information. There is some public debate regarding China's military strategy, foreign policy, international and domestic challenges, bilateral disputes and military weaponry (new acquisitions), but this is highly constrained through stringent media censorship. Sporadically, the Ministry of Defence organises relevant press conferences to answer questions on defence policy and the budget. Information on legislative debate is scarce and heavily controlled by the government (refer to the NPC website for reports on such debates - last source). The NPC's influence over defence policy is minimal and relevant debates are necessarily supportive of the government's decisions.
In addition, China announces its defence budget annually. Both national defence policy and the budget are publicly discussed on traditional media involving commentators and analysts, as well as in Chinese social media such as Weibo and major portals such as SINA and QQ facilitate a slightly more open discussion. More recent debates (2014/2015) over China’s defence budget are the most open since China started publishing relevant information. However, as with all defence related questions, discussion is based on state-provided resources, not on investigative journalism, and heavily influenced by the prevailing culture of censorship.
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California, 2011 p.6-7
China's 2015 White Paper on National Defence, http://eng.mod.gov.cn/Database/WhitePapers/index.htm accessed August 13 2015
China’s Consistently Inconsistent South China Sea Policy, http://thediplomat.com/2014/05/chinas-consistently-inconsistent-south-china-sea-policy/
PLA Daily, &quoute;The founding of the website of the Ministry of Defence strengthens China's Military transparency&quoute;, and http://www.chinamil.com.cn/
Ministry of Defence official website, http://news.mod.gov.cn/headlines/2011-12/27/content_4331607.htm accessed May 2 2014
Bloomberg &quoute;China’s defence Spending Slows as Xi Turns Graft Push on PLA&quoute;, http://www.bloomberg.com/news/articles/2015-03-04/china-s-defence-spending-increase-to-slow-in-2015-to-10-percent, accessed August 13 2015
Newsweek &quoute;Xi Struggles to Contain China’s Burgeoning Online Journalists&quoute;, http://www.newsweek.com/xi-struggles-contain-chinas-burgeoning-online-journalists-360082 accessed August 13 2015
Report on Sina: http://mil.news.sina.com.cn/2014-03-05/0815767199.html accessed May 2 2014
Report on QQ: http://finance.qq.com/a/20130228/008167.htm accessed May 2 2014
Interview with Source 2, Journalist, 23 May 2014
2014 NPC work report http://www.xinhuanet.com/english/2014lh/ accessed Nov 4 2014
Opinion: Agree with Comments
Comment: A major issue concerning the selectivity of the debate is that of China's nuclear policy: given the country's current modernization and acquisitions, this is one of the most sensitive subject areas.
(see: Nicolas, Giacometti, 'China’s Nuclear Modernization and the End of Nuclear Opacity', 2014 at http://thediplomat.com/2014/04/chinas-nuclear-modernization-and-the-end-of-nuclear-opacity/).
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Do defence and security institutions have a policy, or evidence, of openness towards civil society organisations (CSOs) when dealing with issues of corruption? If no, is there precedent for CSO involvement in general government anti-corruption initiatives?
The involvement of CSOs in issues of corruption in general is marginal and discouraged by local governments, unless it follows the limited available official channels and procedures. The 2007 establishment of the National Corruption Prevention Bureau has made steps towards including CSOs in anti-corruption efforts but it is not involved in corruption in the military.
The Army and the Ministry of Defence do not maintain relations with non-government organisations other than the Party-controlled ones, such as the Communist Youth League, which is frequently involved in informational/propaganda campaigns. The CCP and PLA's culture of secrecy and deep mistrust of any independent non-government organisations prevent CSO involvement in this area of work. The PLA cooperates with Chinese academia for officer training and advice but there is no evidence of cooperation in the field of corruption.
Response to Peer Reviewer 1: this comment is valid, but not directly relevant to the criteria in this question, which refers to CSO organisation's engagement with security and defence institutions and not the Chinese state in general. The score should remain '0' as there is absolutely no evidence to suggest such a process.
Interview with Source 1, academic specializing on civil society, 25 April 2014
Jeffrey Becker, &quoute;Tackling Corruption at its Source: The National Corruption Prevention Bureau&quoute; Journal of Chinese Political Science, vol. 13, no. 3, 2008
National Corruption Prevention Bureau official website, http://www.nbcp.gov.cn
Huang Xiaoyong (ed.), Report on China's Civil Organizations&quoute; (Beijing: Social Sciences Academic Press, 2010)
Tsinghua University forging the Air Force Blue new generation of elite pilots&quoute; PLA Daily, September 14, 2011, accessed on 1 May 2014 url: http://military.people.com.cn/GB/42967/15651210.html
Information Office of the State Council of the People's Republic of China: &quoute;White Paper on China's Efforts to Combat Corruption and Build a Clean Government&quoute;, December 2010, accessed on 9th June 2014, url: http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan043696.pdf
Opinion: Disagree
Comment: Even if the prevailing tendency in China is to fear NGOs as potential anti-government forces, the latter are a reality and growing in number in the country. This could not be possible without some form of governmental support. The Chinese government, indeed, is quite happy to delegate certain &quoute;welfare functions&quoute; to NGOs, especially international ones. This tactic allows the authorities to provide the population with some form of service - from which it often manages to take credit, partly placating more vehement demand for reforms - while allocating resources in other sectors.
To conclude, China's posture towards NGOs is rather contradictory, seeking on the one hand to benefit from them (mainly financially), but on the other fearing the consequences that an even more pronounced &quoute;civil society awakening&quoute; may bring (further social unrest).
(see: Bill, Morton, An Overview of INGOs In Development Cooperation, UNDP, p.329; Yang Yang & Jonathan Peuch, China: Financial assistance from European Union to Chinese NGOs, Eyes on Europe, 23 April 2012 http://www.eyes-on-europe.eu/financial-assistance-from-european-union-to-chinese-ngos/; Calum MacLeod, China silences anti-corruption activists, 31 July 2013, USA TODAY http://www.usatoday.com/story/news/world/2013/07/30/china-corruption-prison/2590301/)
Suggested score: 1
Opinion: Agree with Comments
Comment: Information Office of the State Council of the People's Republic of China: &quoute;White Paper on China's Efforts to Combat Corruption and Build a Clean Government&quoute;, December 2010, accessed on 9th June 2014, url: http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan043696.pdf
Suggested score:
Has the country signed up to international anti-corruption instruments such as, but not exclusively or necessarily, UNCAC and the OECD Convention? (In your answer, please specify which.)
China has signed up to several international and regional anti-corruption instruments. China signed the UN Convention Against Corruption on 10 Dec 2003 and ratified on 13 Jan 2006. China was among many developing countries that opposed any review beyond self-assessment. Also China is not bound by Article 66, paragraph 2, which stipulates that a dispute between two states on the application of the UNCAC may be referred to the International Court of Justice. The International Association of Anti-Corruption Authorities, an organisation promoting the effective implementation of the UN Convention Against Corruption, was established in Beijing in 2006.
China is not a member of the OECD, nor a signatory of the OECD Anti-Bribery Convention. Still, China has endorsed the ADB/OECD Anti-Corruption Initiative for Asia-Pacific (19 April 2005) and has participated as an observer in the OECD Anti-Bribery Convention Working Group. In addition, China has acceded to the UN Convention against Transnational Organised Crime and become a member of the Financial Action Task Force on Money Laundering, the Eurasian Group on Combating Money Laundering and Financing of Terrorism and the Asia/Pacific Group on Money Laundering.
Regarding compliance, the PRC government established a coordination body involving 24 government departments to promote the implementation of the UNCAC and the harmonisation of Chinese laws with its international obligations. The most important example is the 2007 founding of the National Bureau of Corruption Prevention entrusted with the task of promoting international cooperation, technical exchanges and cooperating with Civil Society Organizations. There have been steps to increase transparency regarding government anti-corruption policies such as the 2010 &quoute;Anti-Corruption And Clean Government White Paper&quoute;. In 2011 the PRC became one of only 7 governments in Asia to legislate the offense of foreign bribery of public officials into its criminal law.
In addition, the PRC has participated in the following most recent forums: International Anti-Corruption Conferences (IACC) 2012, the Asian Ombudsman Conferences 2013, the Regional Anti-Corruption Conference for Asia and the Pacific 2014, the APEC Anti-Corruption and Transparency Symposium 2009, the Global Forum on Fighting Corruption and Safeguarding Integrity 2012.
UN Convention Against Corruption, https://www.unodc.org/unodc/en/treaties/CAC/
National Corruption Prevention Bureau official website, http://www.nbcp.gov.cn
Anti-Corruption And Clean Government White Paper, 2010
&quoute;China's Efforts to Combat Corruption and Build a Clean Government &quoute;, PRC government official website, http://english.gov.cn/2010-12/29/content_1775733_10.htm
Margaret Lewis, &quoute;Corruption: Spurring China to Engage in International Law &quoute;, Human Rights in China website, April 1, 2009 url: http://www.hrichina.org/en/content/3714 accessed 1 May 2014
Wendy Wysong, Under-Criminalisation of Foreign Bribery in Asia Pacific&quoute;, Corporate Compliance Insights, February 15, 2012
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there evidence of regular, active public debate on issues of defence? If yes, does the government participate in this debate?
China’s defence policy is publicly discussed in the traditional media involving commentators and analysts, as well as in Chinese social media such as Weibo and major portals such as SINA and QQ. It is important to note, however, that the state has substantial capacity for censoring criticism in both traditional and new social media, as well as shaping any debate. The Ministry of Defence publishes the PLA Daily newspaper, holds press conferences on general and particular issues regarding China’s defence policy, publishes relevant White Papers, has set up the Ministry of National Defence Information Office (2008) and an online platform to provide relevant information. Online discussion forums, such as the Strong Nation Forum hosted by the People's Daily website occasionally hosts government officials.
Public debate on issues of defence and China's foreign policy is regular, involving analysts and academics, working mainly in state think tanks. Public opinion on issues of defence and foreign policy is also influenced by commentators writing in popular publications and online. The authors of books such as &quoute;China Can Say No&quoute; and &quoute;Unhappy China&quoute; draw on popular nationalist sentiment to implicitly challenge the government's approach to defence and foreign policy, urging for a harder position.
Still, the government maintains significant ability for offline and online censorship, while discussions on state media essentially justify the official policy, as there is very limited interaction between MoD officials and journalists that escapes the state's agenda (open debates, interviews etc). And any public commentary is highly constrained by the culture of censorship which mostly deters experts from advancing views which are contrary to government policy on any sensitive topic.
There is evidence of occasional debate between government and opinion-formers and some commitment to fostering dialogue.
Matthew Boswell, Media Relations in China's Military the case of the Ministry of National defence Information Office&quoute;, Asia Policy Number 8 (2009): 97-120
Strong Nation Forum, accessed May 2014 url: http://bbs1.people.com.cn/boardList.do?action=postList&boardId=1
2015 White Paper on National defence
Yongnian, Zheng, Discovering Chinese Nationalism in China: Modernization, Identity and International Relations (Cambridge:Cambridge University Press, 1999)
James Leibold, &quoute;Blogging Alone: China, the Internet, and the Democratic Illusion?&quoute; The Journal of Asian Studies, 70 (2011)
Report on Sina, March 5, 2014, http://mil.news.sina.com.cn/2014-03-05/0815767199.html accessed May 2 2014
Report on QQ: February 8, 2014 http://finance.qq.com/a/20130228/008167.htm published 28-2-2013 accessed May 2 2014
Interview with Source 2, Journalist, 23 May 2014.
Opinion: Agree with Comments
Comment: I fully agree with the comment, but would like to add that ultimately it remains difficult to interpret the nature of criticism of the government in the media; given the control that the Party exercises, many suggest that it could be a way to release some &quoute;societal pressure&quoute;. However, it is also true that the Party is not unanimous, and critics could be a demonstration of internal discrepancies.
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the country have an openly stated and actively implemented anti-corruption policy for the defence sector?
The problem of corruption and the government's anti-corruption policies are openly stated by China's leaders in repeated official announcements.The government has explicitly carried out Army-specialised measures, anti-corruption campaigns, and auditing drives for high-ranking officers. There have been 7 anti corruption campaigns since 1982, with the most recent one starting in late 2012 and continuing until now. The results of anti-corruption campaigns are made available to the public through state controlled media but specific implementation plans other than the initiation of a campaign and lists of those being investigated, remain unclear. The following offer characteristic examples of the PLA's openness in regard to anti-corruption efforts:
In 2006, the Central Military Commission announced the &quoute;Opinions on Building and Improving the System of Punishing and Preventing Corruption in the Armed Forces&quoute; and included anti-corruption in the PLA's 11th Five-Year Plan. In 2006. the Deputy Commander of the Navy and CMC member Wang Shouye was accused of embezzling 300 million RMB and sharing illicit profits with other PLA officers. In 2007, an auditing campaign uncovered more than 4000 chief officers above the regiment level.
Also in 2007, the CMC launched campaigns &quoute;against commercial bribery&quoute; (against corruption in procurement spending), and &quoute;against corrupt practice in conscription work&quoute;, also introducing a hotline for citizens to report PLA officials requesting or accepting bribes to admit new recruits, who have a secure career and income. In 2008, the Central Military Commission introduced an anti-corruption plan for the period 2008-2012. Again, in September 2011, the Central Military Commission issued an internal circular on strengthening auditing work, while in November of the same year, it established an anti-corruption research center at the National defence University.
In 2014, the new Chinese administration under Xi Jinping initiated an extensive anti-corruption crackdown in the military, which involved high-ranking officials, most notably Xu Caihou, Gu Junshan and exposed networks of corruption. Exact numbers of military officers charged with corruption offenses have not been announced. In total, 180.000 cases involving Party, government and PLA officials have been reported. Whether or not this can be equated with an anti-corruption policy is of course another issue, and many commentators have questioned the extent to which decisions over who is targeted are politically motivated and whether, in the absence of any fundamental institutional changes, the impact will be sustainable.
There is however some evidence that the approach is not just limited to political purges, but may extend to wider institutional reforms: in March 2015, the Chinese Army carried out its first open bidding for nearly USD 15 million worth of equipment - the first time that the People's Liberation Army (PLA) military weapon procurement website has been used for competitive bidding. But there is limited availability of public information on any wider initiatives, or longer term plans.
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
James Mulvenon, &quoute;So Crooked They Have to Screw Their Pants On: New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
&quoute;A New Direction for China's defence Industry&quoute;, Rand Corporation (2005) http://www.rand.org/pubs/monographs/2005/RAND_MG334.pdf;
&quoute;Politburo, army, casinos: China’s corruption crackdown spreads&quoute;, Guardian, February 2015, http://www.theguardian.com/world/2015/feb/14/china-corruption-crackdown-spreads-xi-jinping
&quoute;China's war on corruption is far from over&quoute;, SCMP, August 3, 2015
&quoute;China’s defence Spending Slows as Xi Turns Graft Push on PLA&quoute;, Bloomberg, http://www.bloomberg.com/news/articles/2015-03-04/china-s-defence-spending-increase-to-slow-in-2015-to-10-percent
&quoute;With Latest Ouster, China Steps Up Fight Against Military Corruption&quoute;, the Diplomat, http://thediplomat.com/2015/07/with-latest-ouster-china-steps-up-fight-against-military-corruption/
&quoute;Graft-hit Chinese military launches open bid for arms purchase&quoute;, March 2015, http://zeenews.india.com/news/world/graft-hit-chinese-military-launches-open-bid-for-arms-purchase_1564338.html
&quoute;China launches website on military weaponry procurement&quoute;, Xinhua, January 2015, http://news.xinhuanet.com/english/china/2015-01/04/c_133895890.htm
&quoute;Growing CCDI Power Brings Questions of Politically-Motivated Purge&quoute;, Willy Lam, February 2015, http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=43499&tx_ttnews%5BbackPid%5D=25&cHash=1b92b9b37fc254cf70594ef2b8f45595#.VfvQz99Vikq
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: Anthony Kuhn: &quoute;China Puts Brass on Trial in Fight Against Military Corruption&quoute;, NPR, May 14th 2014, accessed 9th June 2014, url: http://www.npr.org/blogs/parallels/2014/05/14/310695052/china-puts-brass-on-trial-in-fight-against-military-corruption
Angela Meng: &quoute;Gold, Liquor and Houses: new details emerge of disgraced General Gu Junshan's graft loot&quoute;, South China Morning Post, January 15th 2014, updated April 1st 2014, accessed 9th June 2014, url: http://www.scmp.com/news/china/article/1406027/new-details-emerge-disgraced-general-gu-junshans-graft-loot
Suggested score:
Are there independent, well-resourced, and effective institutions within defence and security tasked with building integrity and countering corruption?
There are no independent institutions tasked with building integrity and countering corruption in the Army. Anti-corruption institutions in the PLA are under the political control of the Party through the CMC structure. At the central level these are: the CMC's Discipline Inspection Commission -The General Political Department's Discipline Inspection Department (and its subordinate Discipline Inspection Bureau). At the unit level, anti-corruption work is entrusted to the political departments/discipline inspection committees of the Party committees and the unit auditing offices. Bao Shixiu, a senior military strategist at the Chinese Academy of Military Science, has characteristically noted that &quoute;the discipline inspection committees should be independent enough, but are still under the leadership of the Party committee.&quoute;
Measuring the effectiveness of institutions requires transparency regarding the extent of the problem, resources available and the particular aspects of the policies implemented. In the case of the PLA, although some high-profile cases have been exposed, there is little public understanding of the actual work of these institutions, the cases investigated, examined and prosecuted. The CCP has a very high degree of institutional and political involvement in military anti-corruption work.
Susan M. Puska, 'Taming the Hydra: Trends in China's Military Logistics Since 2000' in Roy Kamphausen, David Lai, and Andrew Scobell edited The PLA at Home and Abroad: Assessing the Operational Capabilities of China's Military (Strategic Studies Institute, Carlisle, PA; 2010) 143
Shambaugh, David Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
An Baijie, Military takes aim at corruption&quoute;, Global Times, September 28, 2010
James Mulvenon, Soldiers of Fortune: The rise and Fall of the Chinese Military-Business Complex 1978-1998&quoute; (NY: M.E. Sharpe, 2001), 160-170
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The defence Transparency Project, University of California, 2011
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Chinese Official calls for more anti-corruption efforts in military&quoute;, Xinhua, May 23, 2006
Former Chinese navy deputy commander stripped of parliamentary post&quoute;, Xinhua, June 29, 2006
Chinese army bans corrupt practice in conscription work&quoute; Wen Wei Po newspaper, November 16, 2007
Chinese army issues a five-year plan on fighting corruption&quoute;, Xinhua, September 23, 2008
China to strengthen auditing within Army&quoute;, Xinhua, September 5,
2011 Chinese army sets up anti-graft research centre&quoute;, Xinhua, November 3, 2011
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the public trust the institutions of defence and security to tackle the issue of bribery and corruption in their establishments?
It is extremely difficult to evaluate public perception in China, reliable survey data is scarce and it can be difficult to generalise from responses to media stories in social media; a recent, albeit small, survey of views on the South China Sea disputes, for example, suggested that online coverage does not necessarily represent the mainstream of public opinion.
According to the 2013 World Values Survey (WVS), 84% of Chinese citizens demonstrate “a great deal” or “quite a lot of ” confidence in the PLA. Apart from the WVS, no specialised surveys on the public’s perception of corruption in the Chinese military were located in either Chinese or Western academic databases (CAJ, JSTOR, EBSCOhost). However, the WVS is in accordance with surveys published in the mainland, such as the 2008 Attitudes Towards Citizenship in China Survey by Peking University, which reported above 80% of positive attitudes towards the party, the army, and state organs.
However, at the same time corruption is one of the most important pressing problems for the Chinese public. Transparency's International Corruption Perceptions Index ranks China in position 100/175 (80/175 in the 2013 CPI). Also the 2014 CPI reports that 35% of Chinese find the government's anti-corruption policies as ineffective and a further 30% as neither effective nor ineffective.
If we combine high trust in the PLA and the low trust in the government's anti corruption policies, a score of 2 is justified, though of course public perception may well be shifting as a result of recent high profile purges and scandals.
World values survey 2013, China report, accessed May 2, 2014 http://www.worldvaluessurvey.org/WVSOnline.jsp
Corruption Perceptions Index, http://www.transparency.org/cpi2014
Chinese public opinion on the East China and South China Seas, March 2015, http://www.aspistrategist.org.au/chinese-public-opinion-on-the-east-china-and-south-china-seas/
Shen Minmin, &quoute;Attitudes towards citizenship in China: Data report of a National Survey&quoute;, (Beijing: Shehui kexue wenxian chubanshe, 2009)
'Inflation, corruption, inequality top list of Chinese public’s concerns'
November 8, 2013 http://www.pewresearch.org/fact-tank/2013/11/08/inflation-corruption-inequality-top-list-of-chinese-publics-concerns/ accessed Dec 10, 2014
Opinion: Agree with Comments
Comment: The main problem with data and statistics in China, in general, is that figures often are unreliable. As a matter of fact, local governor or lower level functionaries tend to exercise direct or indirect pressure on the people being surveyed, hoping to come out of polls &quoute;with a better image&quoute;. This happens because of inherent structural problems in the political system, whereby the central government has for many years encouraged competition - often fierce - among different provinces, relying primarily on quantitative statistics and growth to confer promotions of cadres. For reference, see Lieberthal, Governing China: From Revolution to Reform (2003).
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are there regular assessments by the defence ministry or another government agency of the areas of greatest corruption risk for ministry and armed forces personnel, and do they put in place measures for mitigating such risks?
Corruption risk assessments are a task that falls to the PLA auditing unit. This unit was previously located within the PLA’s General Logistics Department (GLD) which, according to media reports, was considered to be one of the most corrupt divisions of the PLA. But the unit has recently been put under the direct management of the Central Military Commission (CMC). This was around the time an announcement that they would be undertaking a year long audit of all military personnel's income and expenses during 2013 and 2014. China's state media described the move as an effort to heighten &quoute;independence and authority&quoute;.
The official rational behind this move which Xinhua describes as &quoute;a major decision by Chairman Xi and the CMC in an effort to strengthen the army and tighten auditing and supervision over military economic activities&quoute; coupled with the recent changes in PLA public tendering and the identification of high risk roles (see source 3) indicate steps are being taken both to evaluate and mitigate corruption risks within the military. However, despite Xinhua's assurance that Xi Jinping has &quoute;identified the PLA's shortcomings&quoute;, there is no public evidence that a comprehensive and systematic risk assessment has taken place.
In addition, there is an absence of any independent judicial and legislative supervision of corruption risk assessments. The PLA's previous assessments of corruption have taken the form of audits during anti-corruption campaigns, roughly every 4 years, and audits were not routine. These assessments mainly consist of two elements: intensification of audits and normative training. Apart from audits of officers' wealth and finances, Party committees in the Army have also sought to raise anti-corruption awareness, mainly through the study of role models and political sessions that aim at cultivating anti-corruption norms and attitudes (Shambaugh, 2002).
This may of course change following the recent reform. Xi Jinping's administration has made many changes in the anti-corruption mechanisms of the PLA and a few high profile cases have been investigated as part of a new auditing campaign. It is unclear, however, whether routine anti-corruption work will benefit in the long run.
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
&quoute;China Focus: PLA gets tough on duty crimes&quoute;, Xinhua, December 2014, http://news.xinhuanet.com/english/china/2014-12/01/c_133825336.htm
John Garnauld, &quoute;Chinese general to Fight Corruption' Sydney Morning Herald, January 19, 2012,
Shambaugh, David Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
&quoute;China's military committed to reform&quoute;, September 2015, http://news.xinhuanet.com/english/2015-09/06/c_134595203.htm
&quoute;China military reaches key decision to strengthen auditing&quoute;, Xinhua November 2014, http://news.xinhuanet.com/english/china/2014-11/06/c_133770523.htm
&quoute;Chinese army sets up anti-graft research centre&quoute;, Xinhua, November 3, 2011, http://news.xinhuanet.com/english2010/china/2011-11/03/c_131228204.htm
James Mulvenon, Soldiers of Fortune: The rise and Fall of the Chinese Military-Business Complex 1978-1998&quoute; (NY: M.E. Sharpe, 2001), 160-170
&quoute;PLA to start one-year audit of incomes, expenses of all military personnel&quoute;, February 2015, http://www.globaltimes.cn/content/907293.shtml
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the country have a process for acquisition planning that involves clear oversight, and is it publicly available?
The PLA's White Papers, published approximately every two years since 1998, offer no detailed plan on the Army's acquisition, but the most recent 2015 military strategy paper does give some strong hints on the direction of travel. The paper describes the need to abandon &quoute;the traditional mentality that land outweighs sea&quoute;, and says the Army will to &quoute;elevate its capabilities for precise, multi-dimensional, trans-theater, multi-functional and sustainable operations&quoute;; the Navy should shift its focus more towards &quoute;open seas protection,&quoute; and build a combined, multi-functional and efficient marine combat force structure&quoute;; and that the airforce will &quoute;shift its focus from territorial air defence to both defence and offence.. [and] boost its capabilities for strategic early warning, air strike, air and missile defence, information countermeasures, airborne operations, strategic projection and comprehensive support.&quoute; For the first time, the paper makes clear that &quoute;China will expedite the development of a cyber force&quoute; .The 2013 also provides information on expenses for annual personnel, training, maintenance and equipment budgets, and the percentage of military expenses as part of the GDP.
The White Papers are unclear regarding the process of acquisition planning followed. It is only mentioned that defence budget is decided by the CMC and the government and approved by the NPC. But the CMC Equipment Procurement regulations do set out an annual procurement planning cycle which encompasses provisional plans for the subsequent two years, and more specific plans for the current year, based on the previous years’ forecasting. Each plan is supposed to include a rationale, along with the details of the equipment, quality, price, funding plans, the method of procurement, and manufacturing facility.
The regulation also set out the process by which all this occurs - the General armaments division gives notice to the relevant headquarters and armed service equipment departments, which are required to submit plans by the end of March which are then examined, amalgamated and transmitted back down the chain as a single plan by the end of June. Update and proposed adjustments are requested by the middle of October, which are again consolidated and passed back down, with a final evaluation of implementation is supposed to be submitted to the GAL by the end of January. The regulations also make provision for emergency when paperwork can be filed after the fact. But this process does not appear to be subjected to any oversight and the details are not publicly available.
The Chinese government occasionally announces its decision to invest in large scale military hardware such as an aircraft carrier and fighter jets but does not provide details on the army's acquisition planning. The military has also launched a website in January 2015 for military procurement which provides some information on the country's weapon and armament needs, relevant policies, procurement notices, enterprise lists and technology. State media say the platform was established &quoute;to cement military and civilian integration and aims to accelerate steps in armament procurement system reform, break procurement barriers, improve competitiveness and promote efficiency.&quoute;
China’s Defence White Paper, 2013 & 2015
Franz-Stefan Gady, &quoute;China to Embrace New 'Active defence' Strategy&quoute;, The Diplomat, May 2015, http://thediplomat.com/2015/05/china-to-embrace-new-active-defence-strategy/
“Equipment procurement regulations” (excerpts), Central Military Committee, issued October 2002, available on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/486982.html
Shannon Tiezzi, &quoute;In New White Paper, China's Military Embraces Global Mission&quoute;, The Diplomat, May 2015, http://thediplomat.com/2015/05/in-new-white-paper-chinas-military-embraces-global-mission/
Elsa Kania, &quoute;China: Active defence in the Cyber Domain&quoute;, The Diplomat, June 2015, http://thediplomat.com/2015/06/china-active-defence-in-the-cyber-domain/
Military and Security Developments Involving the People's Republic of China in 2013, Annual report to the USA Congress, accessed May 2,2014, url:http://www.defence.gov/pubs/2013_china_report_final.pdf
'PLA Navy set to build 10 aircraft carriers', Want China Times, August 12, 2014
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140812000008&cid=1101 December 10, 2014
&quoute;China launches website on military weaponry procurement&quoute;, Xinhua, January 2015, http://news.xinhuanet.com/english/china/2015-01/04/c_133895890.htm
Military procurement website, http://www.weain.mil.cn/
Opinion: Agree with Comments
Comment: I agree. However, despite all its shortcomings, China has been undertaking constant improvements over the last decades. However small these steps may be, the very publication of Defence White papers is a recent and welcome change; the same can be said for many army-related publications that go beyond budgetary issues, for instance the doctrines lying behind the process of acquisition - which are available in many bookshops in China, yet often only in Chinese language and paper version.
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is the defence budget transparent, showing key items of expenditure? This would include comprehensive information on military R&D, training, construction, personnel expenditures, acquisitions, disposal of assets, and maintenance.
There is very limited transparency, as relevant information includes only basic figures: annual expenses for personnel, training and maintenance and equipment budgets, and the percentage of military expenditure as part of the GDP. Special budgets remain secret but these refer to large categories of expenditure: expenses for strategic forces, foreign acquisitions, military R&D, and the military component of space exploration. The expenses for China's paramilitary forces and the PLA's own revenue created by its corporations and the allocation of these funds remain undefined.
There are also many allegations of a large gap between China’s official defence budgets and its actual defence spending (Shambaugh, 2002; Cordesman, 2007; Wong, 2012; Keck, 2014; USA Congress report). In 2014 a substantial increase of China's military budget (12.2% in relation to 2013) was partly attributed to more expenditures becoming public (Keck, 2014; Wong, 2014), but the actual extent of items being kept outside the official budget is unknown.
China’s official defence budget is expected to rise by 10.1% in 2015, though as pointed above this does not take into account of various expenditures such as weapons imports, research and development, and money spent on the PLA’s strategic forces. Estimates of additional, off-the-books spending range from 35 percent to 50 percent of total defence expenditures.
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The diplomat, March 08, 2014
&quoute;Confirmed: China’s defence Budget Will Rise 10.1% in 2015&quoute;, the Diplomat, March 2015, http://thediplomat.com/2015/03/confirmed-chinas-defence-budget-will-rise-10-1-in-2015/
Edward Wong, China Announces 12.2% Increase in Military Budget, The New York Times, March 5 2014
Anthony H. Cordesman and Martin Kleibe, &quoute;Chinese Military Modernization: Force Development and Strategic Capabilities&quoute; (Washington: CSIS, 2007), .49-50
Shambaugh, David Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
China’s defence White Papers, 2013 & 2015
Richard A. Bitzinger, &quoute;China's Double-Digit defence Growth&quoute;, Foreign Affairs, March 2015, https://www.foreignaffairs.com/articles/china/2015-03-19/chinas-double-digit-defence-growth
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there a legislative committee (or other appropriate body) responsible for defence budget scrutiny and analysis in an effective way, and is this body provided with detailed, extensive, and timely information on the defence budget?
Overall the NPC has no influence on the PLA’s budget. The Chinese constitution refers to a process of examination and approval of military budget by the NPC, but there is no information on the specific proceedings. The National People's Congress does not have a committee for defence budget scrutiny and analysis, and despite criticism and calls for action in this regard by Chinese legal experts (2007), there has been no announcement regarding the establishment of this committee in the recent sessions of the NPC (2014-2015).
National People's Congress website, http://www.npc.gov.cn
2015 NPC and CPPCC sessions website, http://www.news.cn/politics/2015lh/
Constitution of the PRC, articles 62 par 6, 67 par 6, 92
Sun Zhi, Experts urge Chinese Legislature to form defence committee&quoute;, Ta Kung Pao newspaper, December 20, 2007.
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002).
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China,&quoute; Northeast Asia defence Transparency Project - Policy Brief 2011-4, October 2011
Opinion: Agree with Comments
Comment: As clearly demonstrated, no such legislative committee exists in China, unless one wants to consider the alleged role of the NPC. That being said, critics quite confidently suggest that it is not up to the PLA to determine its own budget: it is, instead, the very way through which core civilian leaders, in the less transparent form of CCP's Politburo committees, maintain control over the military.
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is the approved defence budget made publicly available? In practice, can citizens, civil society, and the media obtain detailed information on the defence budget?
Basic defence budget figures are publicly available via the NPC and MoD/PLA websites and state-controlled media. And some small steps towards increasing transparency in the PLA have taken place since 2012, including more information regarding the structure of its armed forces and it is also believed that some secret military budgets have been added to the ones that are made publicly available in the 2014 budget (Keck, 2014; Hille, 2013).
But there is overall a high degree of opacity. There are for example no separate budget lines ground forces, navy, or air force, defence white papers stopped breaking down spending by personnel, operations and support, and equipment in 2009, and as mentioned previously estimates over unofficial defence spending vary widely. Given China's current political system and secretive military establishment it is highly unlikely that a citizen, a journalist or a social organization could obtain more detailed information, and making requests for such information may place the individual at some risk or increased scrutiny by the state.
National People's Congress website, http://www.npc.gov.cn
2015 NPC and CPPCC sessions website, http://www.news.cn/politics/2015lh/
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
Richard A. Bitzinger, &quoute;China's Double-Digit defence&quoute;, March 2015, https://www.foreignaffairs.com/articles/china/2015-03-19/chinas-double-digit-defence-growth
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The Diplomat, March 08, 2014
Franz-Stefan Gady, &quoute;Confirmed: China’s defence Budget Will Rise 10.1% in 2015&quoute;, The Diplomat, March 2015
Kathrin Hille, China lifts lid on military secrecy, Financial Times, April 16, 2013
url: http://www.ft.com/cms/s/0/a94d4702-a685-11e2-95b1-00144feabdc0.html#axzz30a2wWOFo accessed May 1st, 2014
Interview with Source 2, Journalist, 23 May 2014.
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are sources of defence income other than from central government allocation (from equipment sales or property disposal, for example) published and scrutinised?
There is no improvement in the publication of non-central government sources of funding since the last Defence Index in 2013. Earnings from international arms sales, PLA commercial and defence enterprises are not reported in the PLA's publicly available budget. In addition, subsidies to the Chinese arms industry remain secret. As a result, international estimates on the exact spending of the PLA vary considerably, with some experts claiming that the official budget refers to approximately 50-75% of the actual one.
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
Richard A. Bitzinger, &quoute;China's Double-Digit defence&quoute;, March 2015, https://www.foreignaffairs.com/articles/china/2015-03-19/chinas-double-digit-defence-growth
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The Diplomat, March 08, 2014
Franz-Stefan Gady, &quoute;Confirmed: China’s defence Budget Will Rise 10.1% in 2015&quoute;, The Diplomat, March 2015
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The diplomat, March 08, 2014
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China,&quoute; Northeast Asia defence Transparency Project - Policy Brief 2011-4, October 2011.
Richard Fischer,China's Military Modernization: Building for Regional and Global Reach (Praeger: Connecticut, 2012 ), 17
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects (Berkley: California University Press, 2002), 185
Anthony H. Cordesman and Martin Kleibe, Chinese Military Modernization: Force Development and Strategic Capabilities (Washington: CSIS, 2007), 49
Transparency International, ‘Government Defence Anti-Corruption Index 2013: China Assessment’, http://government.defenceindex.org/sites/default/files/documents/GI-assessment-China.pdf
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there an effective internal audit process for defence ministry expenditure (that is, for example, transparent, conducted by appropriately skilled individuals, and subject to parliamentary oversight)?
There is evidence that audit functions can expose cases, including the high-profile ones examined in the sources), but this has only really occurred in periods of centrally driven anti-corruption campaigns. In the last 10 years some high-profile cases have emerged as a result of these audits. However, there is no evidence of successful routine internal audits. The fact that the PLA Audit Agency, the internal financial audit organisation has recently been put under the direct management of the Central Military Commission (CMC) is a strong signal that this internal function has not been judged by the Chinese leadership to have been effective.
The operation and reports of the PLA's Audit Agency are not published and are not under NPC scrutiny, so it is unclear how active and rigorous the process it. And all the aforementioned sources indicate that political intervention (from the central leadership or cliques within the Party) takes place and influences the outcome of the audit process.
Response to Peer Reviewer: Agree, particularly in light of the recent changes in oversight of the Agency which adds to the evidence that it has been largely ineffective.
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
&quoute;China military reaches key decision to strengthen auditing&quoute;, Xinhua November 2014, http://news.xinhuanet.com/english/china/2014-11/06/c_133770523.htm
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
Anthony H. Cordesman and Martin Kleibe, Chinese Military Modernization: Force Development and Strategic Capabilities (Washington: CSIS, 2007) p.49-50
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011): 7
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects (Berkley: California University Press, 2002), 185
Opinion: Agree
Comment:
Suggested score:
Opinion: Disagree
Comment: Based on the recent case of general Gu Junshan and the Willy Lam article, it becomes obvious that the auditing process is only periodically used, with varying efficiency/ success. The lags between the revelation of fraud and corruption and trials/ punitive action in the military indicate inefficiency or lack of political will/ power to pursue such cases, as in the case of Gu Junshan, when investigation took 2 years, with claims that powerful cliques within army presented obstacles to the process.
Ng, Teddy: &quoute;PLA General Gu Junshan faces court martial as prosecutors press four graft charges&quoute; South China Morning Post, published 31st March 2014, updated 1st April 2014, accessed 12th June 2014, url: http://www.scmp.com/news/china/article/1461810/pla-general-gu-junshan-faces-court-martial-prosecutors-press-four-graft
Suggested score: 1
Is there effective and transparent external auditing of military defence expenditure?
There is no evidence of external auditing or of any relevant discussion about the prospect of establishing one. Auditing of military expenditures is controlled by the CMC and implemented by its relevant organs
(Shambaugh, 2002; Garnauld, 2012; Perlo-Freeman 2011).
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011): 7
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects (Berkley: California University Press, 2002), 185
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there evidence that the country's defence institutions have controlling or financial interests in businesses associated with the country's natural resource exploitation and, if so, are these interests publicly stated and subject to scrutiny?
There is no evidence (in media articles and government/PLA announcements) that any measures have been taken to increase transparency in this respect since the last Defence Index in 2013.
The PLA's involvement in businesses associated with the country's natural resource exploitation has been long and goes back to 1978, when PLA units were encouraged to raise revenue to fund part of their operations and at a second stage, produce for the market and public consumption. The Daqing oil fields in Xinjiang that the PLA controlled exclusively throughout the 1990s is an example of the Army's involvement in the natural resources sector. In this period, the private businesses of the PLA became a major source of corruption as embezzlement of profits, tax evasion, speculation, illicit sales and smuggling became frequent occurrences, damaging both the PLA's reputation and its military effectiveness.
In 1998 the Chinese government implemented a divestiture of the Chinese military from businesses, which has been characterised as generally successful by many analysts (Shambaugh, 2002; Bickford, 2006). The PLA lost control of approximately 6.000 out of 10.000 enterprises. Those still under the PLA's direction include farming and basic logistical support, hotels, telecommunications and defence. It is not clear to what extent the PLA's involvement in the natural resources sector has declined. In addition, indirect control of companies associated with China's natural resources , i.e. control through individuals, cannot be measured or assessed accurately, as information is scattered and very hard to access. It is not possible to measure the degree of control of the PLA over natural resources, as such companies registered, for example, in Hong Kong, belonging to relatives of PLA and CCP officers, are not openly linked to the military.
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011): 7
Thomas J. Bickford, The PLA & its changing economic roles: implications for civil military relations&quoute;, in Chinese Civil-Military Relations, ed. Nan Li (NY: Rootledge, 2006), 167-169
Richard Macgregor, The Party: the secret world of China's Communist Rulers (NY: Penguin, 2010), 113-115 Tai Ming Cheung, China's Entrepreneurial Army (Oxford: Oxford University Press, 2001), 185-6
Transparency International, ‘Government Defence Anti-Corruption Index 2013: China Assessment’, http://government.defenceindex.org/sites/default/files/documents/GI-assessment-China.pdf
Leaked Records Reveal Offshore Holdings of China's Elite, The International Consortium of Investigative Journalists 21-2-2014 http://www.icij.org/offshore/leaked-records-reveal-offshore-holdings-chinas-elite accessed Nov 3, 2014
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects (Berkley: California University Press, 2002)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: Bartholomew, Carolyn (2009): 2009 Report to Congress of the US- China Economic and Security Review Commission, US Government Printing Office: Washington DC
Suggested score:
Is there evidence, for example through media investigations or prosecution reports, of a penetration of organised crime into the defence and security sector? If no, is there evidence that the government is alert and prepared for this risk?
There is sporadic evidence (Garnauld, 2012; Shambaugh 2002) of organised crime penetration and of connections between defence personnel with crime networks. These mainly refer to smuggling operations in border areas (especially in Fujian province and South China), the black market, prostitution, the operation of illegal establishments etc.
In the last 15 years there have been repeated crackdowns and campaigns against organised crime and the introduction of special units (for example against smuggling) that are independent from the PLA. However, there is no new available information regarding any developments in this respect since the 2013 Defence Index. Since 2000, there has been a crackdown of such activities accompanied with concrete measures such as the introduction of a special anti-smuggling police to control the borders, a task previously bestowed upon the Army. In addition, the anti-corruption campaigns have intensified since the mid-2000s, also addressing the issue of organised crime.
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
Bill Gertz, “Organized-crime triads targeted”, The Washington Times, April 30, 2010
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects (Berkley: California University Press, 2002), 205-2010
Ni Erxian, &quoute;The new Central Commission - New, strong and committed team in control of the military&quoute;, Wen WeiPo Newspaper, November 1, 2007
Tai Ming Cheung, China's Entrepreneurial Army (Oxford: Oxford University Press, 2001), 185-6
Opinion: Agree with Comments
Comment: Not only does the Chinese government hardly ever disclose information on these topics, but also, it is very susceptible to external pressure or criticism, as the Li Fangwei (AKA Karl Lee) incident demonstrates, for instance. See https://www.acsss.info/proliferation/item/319-li-fang-wei-karl-lee-proliferation-case-study-series
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there policing to investigate corruption and organised crime within the defence services and is there evidence of the effectiveness of this policing?
The CMC's Discipline Inspection Commission and The General Political Department's Discipline Inspection Department (and its Discipline Inspection Bureau) are responsible for investigation and policing of corruption and organised crime at the central level. At the unit level, anti-corruption work is carried out by the local political departments/discipline inspection committees and with the assistance of the unit auditing offices.
Even in the Maoist era there were reports regarding connections between the PLA and organised crime (cross-border smuggling and cooperation with triads in Hong Kong). This increased during the 80s and 90s, expanding to prostitution, gambling and the selling of military assets. In the 2000s the PLA increased its anti-corruption efforts and exposed organised crime practices and connections. Still, these affairs are mainly handled in secrecy and the relevant information is monitored and controlled.
Having said that, the recent (2012-2014) announcement of many cases of high ranking officers may suggest that effectiveness has increased in the short-term as a result of the ongoing campaign. There is no evidence of institutional improvement of policing in terms. (Garnauld, 2012; Lam 2013)
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
David Shambaugh, Modernizing China's Military: Progress, Problems and Prospects (Berkley: California University Press, 2002), 124-126, 131-6
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011): 7
James Mulvenon, Soldiers of Fortune: The Rise and Fall of the Chinese Military-Business Complex 1978-1998 (NY: M.E. Sharpe, 2001), 160-170
Bill Gertz, Organized-crime triads targeted, The Washington Times, April 30, 2010
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are the policies, administration, and budgets of the intelligence services subject to effective, properly resourced, and independent oversight?
There are no external controls over the policies, administration, budgets and personnel affairs of China's intelligence services, which are controlled by the CCP and remain among the most secretive in the world. Intelligence agencies do not even have publicly registered addresses, phone numbers or websites, and the words &quoute;intelligence agency&quoute; are not allowed in the media. Internally the budget, policies and administrations of secret services are under the control of the Party.
Yang Hengjun, &quoute;Fixing China's Intelligence System&quoute;, The Diplomat, March 2015, http://thediplomat.com/2015/03/fixing-chinas-intelligence-system/
Chinese Intelligence Agencies, Federation of American Scientists website, accessed 3 May 2014 url: http://www.fas.org/irp/world/china/
Alex Newman, &quoute;China's Growing Spy Threat,&quoute; The Diplomat (September 19, 2011) http://the-diplomat.com/2011/09/19/chinas-growing-spy-threat/?all=true
Macgregor, Richard, The Party: the secret world of China's Communist Rulers (NY: Penguin, 2010)
Bill Gertz, Chinese spy who defected tells all&quoute;, The Washington Times, March 19, 2009, accessed on May 3 2014 url: http://www.washingtontimes.com/news/2009/mar/19/exclusive-chinese-spy-who-defected-tells-all/print/
Peter Becker, Eyes and ears of the Dragon: Chinese intelligence services Organisation and activities&quoute; Netherlands Intelligence Studies Association, 2008, accessed on May 3, 2014, url: http://www.nisa-intelligence.nl/PDF-bestanden/NISAcongresBecker.pdf
Dimitrescu, O. (2010): &quoute;Considerations about the Chinese Intelligence Services (II)&quoute;, World Security Network, published 10th January 2010, accessed 11th June 2014 url: http://www.worldsecuritynetwork.com/China-Europe-Asia-United-States/Dumitrescu-Octavian/Considerations-about-the-Chinese-Intelligence-Services-II
Opinion: Not Qualified
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: Dimitrescu, O. (2010): &quoute;Considerations about the Chinese Intelligence Services (II)&quoute;, World Security Network, published 10th January 2010, accessed 11th June 2014 url: http://www.worldsecuritynetwork.com/China-Europe-Asia-United-States/Dumitrescu-Octavian/Considerations-about-the-Chinese-Intelligence-Services-II
Suggested score:
Are senior positions within the intelligence services filled on the basis of objective selection criteria, and are appointees subject to investigation of their suitability and prior conduct?
China's intelligence services are very secretive and information on senior appointments is not publicly available, apart from the Head of National Security and the Minister of State Security, and the criteria are unclear. The appointment of senior officials depends on the nomenclature system and the CCP's Organisation Department, which are both very secretive institutions (Shambaugh, 2008; Macgregor, 2010; Becker 2008). The aforementioned resources indicate that a combination of performance, loyalty to the current leadership, political balances and personal relations play a role in senior appointments.
Shambaugh, David. “Training China’s Political Elite: The Party School System” The China Quarterly 196, no 1 (2008): 827-844
Chinese Intelligence Agencies, Federation of American Scientists website, accessed 3 May 2014 url: http://www.fas.org/irp/world/china/
Alex Newman, &quoute;China's Growing Spy Threat,&quoute; The Diplomat (September 19, 2011) http://the-diplomat.com/2011/09/19/chinas-growing-spy-threat/?all=true
Macgregor, Richard, The Party: the Secret World of China's Communist Rulers (NY: Penguin, 2010)
Bill Gertz, &quoute;Chinese spy who defected tells all&quoute;, The Washington Times, March 19, 2009, accessed on May 3 2014 url: http://www.washingtontimes.com/news/2009/mar/19/exclusive-chinese-spy-who-defected-tells-all/print/
Peter Becker, &quoute;Eyes and ears of the dragon: Chinese intelligence services organisation and activities&quoute; Netherlands Intelligence Studies Association, 2008, accessed on May 3, 2014, url: http://www.nisa-intelligence.nl/PDF-bestanden/NISAcongresBecker.pdf
Dimitrescu, O. (2010): &quoute;Considerations about the Chinese Intelligence Services (II)&quoute;, World Security Network, published 10th January 2010, accessed 11th June 2014 url: http://www.worldsecuritynetwork.com/China-Europe-Asia-United-States/Dumitrescu-Octavian/Considerations-about-the-Chinese-Intelligence-Services-II
Mattis, Peter (2012): &quoute;The Analytic Challenge of Understanding Chinese Intelligence Services&quoute;, Studies in Intelligence Vol. 56 (3 ), September 2012, accessed 11th June 2014, url: https://www.cia.gov/library/intelligence-literature/index.html#espionage
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: Dimitrescu, O. (2010): &quoute;Considerations about the Chinese Intelligence Services (II)&quoute;, World Security Network, published 10th January 2010, accessed 11th June 2014 url: http://www.worldsecuritynetwork.com/China-Europe-Asia-United-States/Dumitrescu-Octavian/Considerations-about-the-Chinese-Intelligence-Services-II
Mattis, Peter (2012): &quoute;The Analytic Challenge of Understanding Chinese Intelligence Services&quoute;, Studies in Intelligence Vol. 56 (3 ), September 2012, accessed 11th June 2014, url: https://www.cia.gov/library/intelligence-literature/index.html#espionage
Suggested score:
Does the government have a well-scrutinised process for arms export decisions that aligns with international protocols, particularly the Arms Trade Treaty (ATT)?
China has not signed the ATT and there is no evidence of a well-scrutinised process for arms export decisions that aligns with the Treaty. This could be because signing would bring additional pressure for transparency and potential limitations on trade deals with certain states that are perceived to harm both China's foreign relations and the interests of the Chinese arms industry. These considerations may have so far prevented the signing of the treaty.
China has aligned its arms control decisions with the following international protocols and initiatives:
Protocols (see the Arms Control and Proliferation Association website): UN Resolution 1540 and 1673 (filled necessary reports) Nuclear Non-proliferation Treaty, ABM Treaty, Chemical Weapons Convention (CWC), Biological and Toxin Weapons Convention (BWC) Comprehensive Test Ban Treaty (not ratified), International Atomic Energy Agency (IAEA) Additional Protocol, Outer Space Treaty UN Guidelines for International Arms Transfers. Also China is a member of: the Zangger Committee, the Global Initiative to Combat Nuclear Terrorism, Nuclear Suppliers Group.
China has effective arms export licensing controls in place to ensure compliance with these mainly WMD related non-proliferation commitments, though according to the James Martin Centre for Nonproliferation Studies, China has been accused of not being in compliance with the Biological and Toxin Weapons Convention and of transferring nuclear weapons related material and technologies (to Pakistan).
For convention weapons, the picture is more mixed. Three principles are outlined in official regulations:
(1) Arms export should only be conducive to reinforce the self defence
capabilities of the recipient country;
(2) There should be no injury to the peace, security and stability of the
region concerned and the world as a whole;
(3) There should be no interference in the internal affairs of the
recipient country
But these are evidently vague and there is no evidence of a well-scrutinised process for arms export decisions.
Paul Holtom and Mark Bromley, Next Steps for the Arms Trade Treaty: Securing Early Entry Into Force, Arms Control Association accessed May 3 2014 url: https://www.armscontrol.org/act/2013_06/Next-Steps-for-the-Arms-Trade-Treaty_Securing-Early-Entry-Into-Force
Regulations of the PRC on the Administration of Arms Exports
&quoute;The Evolution of EU and Chinese Arms Export Controls&quoute;, Safer World, March 2012
China's 2015 White Paper on National defence
Manning, Robert et al, China, Nuclear Weapons and Arms Control: a Preliminary Assessment, (NY: Council of Foreign Relations Publication Office, 2000), 64-72
&quoute;Arms Control and Proliferation Profile: China&quoute;, Arms Control Association Website, accessed on May 3 2014, url: http://www.armscontrol.org/factsheets/chinaprofile
James Martin Center for Nonproliferation Studies, http://cns.miis.edu/cbw/possess.htmaccessed November 2014
Joseph Lin, &quoute;China’s Weapons of Mass Consumption&quoute;, Foreign Policy, March 2015, http://www.rt.com/news/243285-china-weapons-export-us/
&quoute;China's Roar in Africa&quoute;, STRATFOR, published 21st February 2014, accessed 11th June 2014, url: http://www.stratfor.com/the-hub/chinas-roar-africa
Bromley, M., Duchâtel, M., Holtom P. (2013): 'China's exports of small arms and light weapons', SIPRI Policy paper, no. 38, SIPRI: Stockholm
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: China has been accused of arms exports to conflict zones under UN sanctions while asserting its diplomatic power to prevent scrutiny, as Chinese arms have been found in Darfur in Sudan, Ivory Coast, Somalia, DRC and North Korea.
&quoute;China's Roar in Africa&quoute;, STRATFOR, published 21st February 2014, accessed 11th June 2014, url: http://www.stratfor.com/the-hub/chinas-roar-africa
Bromley, M., Duchâtel, M., Holtom P. (2013): 'China's exports of small arms and light weapons', SIPRI Policy paper, no. 38, SIPRI: Stockholm
Suggested score:
How effective are controls over the disposal of assets, and is information on these disposals, and the proceeds of their sale, transparent?
There are regulations on procedures and controls over asset disposals which are publicly available. These include: the Law of the People's Republic of China on National Defence (1997), the Law of the PRC on Protecting Military Facilities (1990), the Implementation Measures for the Law of the PRC on Protecting Military Facilities (2001), the Provisions on the Management of the State-Owned Assets of the PLA (2003), as well as more than 30 rules and regulations.
Asset management and disposal is the responsibility of the General Logistics Department and its subordinate Office of the PLA's State-Owned Assets Management, and at the unit level is the responsibility of the logistics departments.
Following cases of the illegal sale of military assets by local units, in 2003 the PLA adopted special mechanisms for the inspection and management of its property, registration of its assets, asset assessment and regular reporting by every unit. There is no publicly available information to assess the success of these measures.
In 2014, a new regulation that directs units to purchase domestically produced cars was followed by official calls for reform in the PLA accounting and asset management processes. Similar reports had emerged in 2011. There will possibly be initiatives on this area in the next two years but it is unclear whether this will involve a robust scrutinising body.
&quoute;Military and Security Developments Involving the People's Republic of China in 2015&quoute;, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
&quoute;Military required to purchase domestic brand vehicles&quoute;, Xinhua January 13, 2014 accessed May 3, 2014 url: http://www.china.org.cn/china/2014-01/13/content_31178703.htm
&quoute;The CMC forwards decision on further strengthening the military's asset management&quoute;, Chinanews.com, October 25, 2011, accessed on May 3, 2014 url: http://www.chinanews.com/gn/2011/10-25/3413154.shtml
Dennis J. Blasko, &quoute;Chinese Military Logistics: The GLD System&quoute;, China Brief Volume: 4 Issue: 19 (2004)
&quoute;The Central Military Commission stresses out the importance of asset management in the army&quoute;, Xingwen Online, October 25, 2011, accessed on 26-2-2012 url: http://xw1806.com/news/junshi/2011-10-25/32923.html Wang Shibin, Ju Weifan,
&quoute;The CMC forwards decision on further strengthening the military's asset management&quoute;, Chinanews.com, October 25, 2011, accessed May 3, 2014
Law of the People's Republic of China on National Defence (1997)
Law of the PRC on Protecting Military Facilities (1990)
Implementation Measures for the Law of the PRC on Protecting Military Facilities (2001)
Provisions on the Management of the State-Owned Assets of the PLA (2003)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is independent and transparent scrutiny of asset disposals conducted by defence establishments, and are the reports of such scrutiny publicly available?
There is no independent scrutiny over asset disposal. The logistics departments in the unit level under the central direction of the General Logistics Department are responsible for asset disposal and any effort to increase effectiveness of this process refers to strengthening the vertical supervision so that unit-level logistic departments carry out their work without interference.
In 2014, a new regulation that directs units to purchase domestically produced cars, was followed by official calls that reforms are needed in the PLA accounting and asset management processes. Similar reports had emerged in 2011. There will possibly be initiatives in this area in the next two years but it is unclear whether this will involve an independent scrutinising body.
Perlo Freeman, Samuel &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, UC San Diego (2011), http://www-igcc.ucsd.edu/assets/001/502466.pdf;
&quoute;Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress&quoute; http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
&quoute;Military required to purchase domestic brand vehicles&quoute;, Xinhua January 13, 2014 accessed May 3, 2014 url: http://www.china.org.cn/china/2014-01/13/content_31178703.htm
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
What percentage of defence and security expenditure in the budget year is dedicated to spending on secret items relating to national security and the intelligence services?
There is no transparency on this matter as the Chinese government and PLA resources on defence and security expenditure do not include secret items as a separate category. Analysts argue that such expenditure is not covered at all in the publicly announced figures (Keck, 2014; Wong, 2008; Perlo-Freeman, 2011; Shambaugh 2002).
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The diplomat, March 08, 2014
&quoute;Confirmed: China’s defence Budget Will Rise 10.1% in 2015&quoute;, the Diplomat, March 2015, http://thediplomat.com/2015/03/confirmed-chinas-defence-budget-will-rise-10-1-in-2015/
Richard A. Bitzinger, &quoute;China's Double-Digit defence&quoute;, March 2015, https://www.foreignaffairs.com/articles/china/2015-03-19/chinas-double-digit-defence-growth
Edward Wong, &quoute;China Announces 12.2% Increase in Military Budget&quoute;, The New York Times, March 5 2014
&quoute;Military and Security Developments Involving the People's Republic of China in 2013&quoute;, Annual report to the USA Congress, accessed May 3,2014, url:http://www.defence.gov/pubs/2013_china_report_final.pdf
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China,&quoute; Northeast Asia defence Transparency Project - Policy Brief 2011-4, October 2011
China's defence White Paper, 2013
China's 2010 White Paper on National Defence
Shambaugh, David, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
Open Budget Survey 2012, China, accessed May 3 url: http://internationalbudget.org/what-we-do/open-budget-survey/country-info/?country=cn
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is the legislature (or the appropriate legislative committee or members of the legislature) given full information for the budget year on the spending of all secret items relating to national security and military intelligence?
There is no dedicated legislative committee or any other evidence suggesting that the National People's Congress is given any kind of information on secret items of the national security and military intelligence.
National People's Congress website, http://www.npc.gov.cn
2015 NPC and CPPCC sessions website, http://www.news.cn/politics/2015lh/
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China,&quoute; Northeast Asia defence Transparency Project - Policy Brief 2011-4, October 2011
China's defence White Paper, 2013
China's 2010 White Paper on National Defence
Shambaugh, David, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
Open Budget Survey 2012, China, accessed May 3 url: http://internationalbudget.org/what-we-do/open-budget-survey/country-info/?country=cn
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are audit reports of the annual accounts of the security sector (the military, police, and intelligence services) and other secret programs provided to the legislature (or relevant committee) and are they subsequently subject to parliamentary debate?
According to China's Audit Law, the CMC is responsible for implementing audit regulations in the Army and the PAP (People's Armed Police) through the PLA's Audit Office. China's Constitution and the PLA's Audit Regulation stipulate no obligation for audit reporting to legislators in the NPC, including for secret programs. Police auditing is the responsibility of the National Audit Office that submits annual reports to the NPC.
Audit Law of the People's Republic of China, accessed September 2015 url:http://www.npc.gov.cn/englishnpc/Law/2007-12/12/content_1383794.htm
PLA's Audit Regulations, accessed on September 2015 http://news.xinhuanet.com/mil/2007-01/22/content_5634731.htm
Kam C. Wong, &quoute;Police Reform in China&quoute; (Florida: CRC Press, 2012), pp136-139
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Off-budget military expenditures are those that are not formally authorised within a country's official defence budget, often considered to operate through the 'back-door'. In law, are off-budget military expenditures permitted, and if so, are they exceptional occurrences that are well-controlled?
The CMC submits annually the defence budget to the NPC for approval. The official budget excludes large categories of military expenses such as Chinese-made weapons and equipment production, strategic forces (large special weapons expenditure), foreign acquisitions, military R&D, military aid, funds allocated to military factories and funds for defence industry conversion, space program-related activities, the funds for the People's Armed Police and reserves (Globalsecurity; Cordesman et al, 2013). These expenses are controlled internally by the CMC without any transparency on the exact processes followed. Off-budget military expenditure is not explicitly permitted by law and it takes place (Shambaugh 2002, Cordesman et al 2013)
White Paper on National Defence 2013 & 2015
Shambaugh, David, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
PLA's Audit Regulations, accessed on September 2015 http://news.xinhuanet.com/mil/2007-01/22/content_5634731.htm
Open Budget Survey 2012, China, accessed September 2015 http://internationalbudget.org/what-we-do/open-budget-survey/country-info/?country=cn
China's defence Budget, March 2015, http://www.globalsecurity.org/military/world/china/budget.htm
Anthony H. Cordesman, Ashley Hess, and Nicholas S. Yarosh Chinese Military Modernization and Force Development (Washington: CSIS, 2013)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
In practice, are there any off-budget military expenditures? If so, does evidence suggest this involves illicit economic activity?
There are substantial off-budget military expenses, including expenses for strategic forces, foreign acquisitions, military R&D, and China's paramilitary forces, even for more recent budgets (2012, 2013 and 2014). In the 1990's the PLA's own economic activities provided revenue that was also used to fund illicit activities (smuggling, prostitution, non-registered businesses) (Shambaugh, 2002). There are no more recent sources on the subject.
Open Budget Survey 2015, China, accessed September 2015 http://internationalbudget.org/wp-content/uploads/OBS2015-CS-China-English.pdf
Shambaugh, David, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
Richard A. Bitzinger, &quoute;China's Double-Digit defence&quoute;, March 2015, https://www.foreignaffairs.com/articles/china/2015-03-19/chinas-double-digit-defence-growth
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The Diplomat, March 08, 2014
Franz-Stefan Gady, &quoute;Confirmed: China’s defence Budget Will Rise 10.1% in 2015&quoute;, The Diplomat, March 2015
Samuel Perlo-Freeman, Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California, 2011 p.6-7
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
In law, are there provisions regulating mechanisms for classifying information on the grounds of protecting national security, and, if so, are they subject to effective scrutiny?
According to article 11 of the &quoute;Law of the People's Republic of China on Protection of State Secrets&quoute;: &quoute;The specific scope and categories of state secrets related to military affairs shall be determined by the Central Military Commission&quoute;. The National Administration for the Protection of State Secrets (NAPSS), which is an organ under the State Council, has delegated full authority to the Central Military Commission regarding classification of information on the grounds of national security. The classification system for state secrets is not scrutinised by an independent body or the national/local people's congresses, and once information is determined to be a state secret there is no mechanism for the review or appeal of classification (see HRiC). As such classification issues are increasingly being raised in Chinese courts, often in open government information cases when individuals sue government agencies to release information, including in order to expose local government corruption , though most such challenges are rejected (see Finder).
The recently published State Secrets Law Implementing Regulations and State Secrets Bureau circular (see sources) require information to be classified on production. Classification provisions have defined which “state organs” can classify information as a “state secret,” though this includes many semi official organisations, academic organisations and state owned enterprises, and the provisions do not specify what can be classified and nor have oversight mechanism improved. So while the classification of information is justified on the basis of protecting national security, there are not effective legal mechanisms to regulate them, and in practice individuals or agencies are likely to continue to influence decisions.
Law of the People's Republic of China on Protection of State Secrets, 2010
State Secrets Law Implementing Regulations, 2014
&quoute;Interim arrangements on state secret management&quoute;, State Secrets Bureau Circular, March 2014, http://www.gov.cn/gongbao/content/2014/content_2671533.htm
Susan Finder, How China Classifies State Secrets, December 2014, http://thediplomat.com/2014/12/how-china-classifies-state-secrets/
China Business Review, &quoute;Understanding China's state secrets&quoute;, 1 Jan 2011, http://www.chinabusinessreview.com/understanding-chinas-state-secrets-laws/
&quoute;State secrets: China's Legal Labyrinth&quoute;, Human Rights in China Report (2013), http://www.hrichina.org/sites/default/files/PDFs/State-Secrets-Report/HRIC_StateSecrets-Report.pdf
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: &quoute;Silencing Critics by Exploiting National Security and State Secrets' Laws&quoute;, Congressional-Executive Committee on China, accessed 12th June 2014, url: http://www.cecc.gov/silencing-critics-by-exploiting-national-security-and-state-secrets-laws
Suggested score:
Do national defence and security institutions have beneficial ownership of commercial businesses? If so, how transparent are details of the operations and finances of such businesses?
The description of the PLA as &quoute;an entrepreneurial army&quoute; refers to its ownership of businesses in the field of agricultural production, logistics, hotels, telecommunications and defence. Although such ownership can be established, the profits from businesses officially associated to the PLA are not calculated as a source of income in national budgets. Indirect control or &quoute;shadow&quoute; companies, i.e. control through individual officers or their relatives, cannot be assessed accurately, as information is scattered and very hard to access.
PLA-owned businesses are publicly listed and are officially under the same scrutiny as normal enterprises for their civilian operations, but not for their military-related projects which fall under the jurisdiction of the CMC and are not publicly known.
In April 2014 there was an announcement that the PLA’s defence institutes working on high-tech weaponry will be formally incorporated into businesses in order to gain access to capital markets. This will be a small improvement but it is not expected to change the overall lack of transparency in regard to the PLA’s businesses.
Response to Peer Reviewer: I disagree with PR1, as the PLA has major interests and ownership in main Chinese enterprises. The score should stay at 1.
Tai Ming Cheung, &quoute;China's Entrepreneurial Army&quoute; (Oxford: Oxford University Press, 2001), 185-6
Mayer Brown, &quoute;Hong Kong Court Calls for Proactive Measures Against Shadow Companies&quoute;, JSM Legal Update, 29 April 2014 accessed 3 May 2014 url: http://www.mayerbrown.com/Hong-Kong-Court-Calls-for-Proactive-Measures-Against-Shadow-Companies-04-29-2014/
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011): 7
Thomas J. Bickford, &quoute;The PLA & its changing economic roles: implications for civil military relations&quoute;, in Chinese Civil-Military Relations, ed. Nan Li (NY: Rootledge, 2006), 167-169
Richard Macgregor, &quoute;The Party: the Secret World of China's Communist Rulers&quoute; (NY: Penguin, 2010), 113-115
Thomas J. Bickford, &quoute;The Chinese Military and Its Business Operations: The PLA as Entrepreneur&quoute;, Asian Survey, Vol. 34, No. 5 (May, 1994), pp. 460-474
Kristina Mani, &quoute;Militaries in Business State-Making and Entrepreneurship in the Developing World&quoute;, Armed Forces & Society, Vol. 33, No. 4, July 2007, pp. 603-611
&quoute;China Said to Plan Capital Market Access for Military&quoute;, Bloomberg News, Apr 23, 2014 accessed May 3 url:
http://www.bloomberg.com/news/2014-04-22/china-said-to-plan-move-of-military-assets-to-listed-companies.html
&quoute;US Senators War on Huawei Dearl with South Korea&quoute;, Financial Times, 4 Dec 2013 accessed May 3, 2014: http://www.ft.com/intl/cms/s/0c064f34-5c5b-11e3-b4f3-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F0c064f34-5c5b-11e3-b4f3-00144feabdc0.html%3Fsiteedition%3Dintl&siteedition=intl&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F6b6d5a08-cabf-11e3-ba95-00144feabdc0.html#axzz30vrYTzVG
Evan S Medeiros, &quoute;Analyzing China's Defence Industries and the Implications for Chinese Military Modernization&quoute;, RAND Corporation report, 2004
Interim Measures for Implementation of Restructuring of Military Industry Enterprises, 2008
Gary K. Busch, &quoute;The Chinese Military-Commercial Complex&quoute;, Ocnus.net, December 3, 2008, accessed on 2 May 2014 url: http://www.ocnus.net/artman2/publish/Editorial_10/The_Chinese_Military-Commercial_Complex.shtml
Opinion: Disagree
Comment: I would say that the score should be between 1 and 2: the PLA's business activities are not transparent, indeed, but these are not &quoute;significant commercial businesses&quoute;. The number of enterprises has dramatically reduced since the 1990s, and PLA's process of professionalization and specialization is continuing.
Thomas J. Bickford, &quoute;The Chinese Military and Its Business Operations: The PLA as Entrepreneur&quoute;, Asian Survey, Vol. 34, No. 5 (May, 1994), pp. 460-474
Kristina Mani, &quoute;Militaries in Business State-Making and Entrepreneurship in the Developing World&quoute;, Armed Forces & Society, Vol. 33, No. 4, July 2007, pp. 603-611
Suggested score: 2
Opinion: Agree
Comment:
Suggested score:
Are military-owned businesses subject to transparent independent scrutiny at a recognised international standard?
The scrutiny of Military Industry Enterprises (MIEs) is only internal and falls under the responsibility of the CMC. Relevant audit reports are not made public. The Chinese government has enforced central planning and oversight over Military Industry Enterprises. These enterprises are regulated by the Commission for Science, Technology and Industry for National Defence and legally are civilian entities under the authority of the State Council. They are contracted by the People's Liberation Army (PLA) to produce military items, a process supervised by the General Armaments Department of the CMC. Audit mechanisms are not independent from Party control.
On the other hand, PLA-owned businesses are publicly listed and are officially under the same scrutiny as normal enterprises for their civilian operations, but not for their military-related projects. The latter fall under the jurisdiction of the CMC and not of civilian courts.
In April 2014 there was an announcement that the PLA’s defence institutes working on high-tech weaponry will be formally incorporated into businesses in order to gain access to capital markets. This will be a small improvement but it is not expected to change the overall lack of transparency in regard to the PLA’s businesses.
&quoute;China Said to Plan Capital Market Access for Military&quoute;, Bloomberg News, Apr 23, 2014 accessed May 3 url:
http://www.bloomberg.com/news/2014-04-22/china-said-to-plan-move-of-military-assets-to-listed-companies.html
&quoute;US Senators War on Huawei Dearl with South Korea&quoute;, Financial Times, 4 Dec 2013 accessed May 3, 2014: http://www.ft.com/intl/cms/s/0c064f34-5c5b-11e3-b4f3-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F0c064f34-5c5b-11e3-b4f3-00144feabdc0.html%3Fsiteedition%3Dintl&siteedition=intl&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F6b6d5a08-cabf-11e3-ba95-00144feabdc0.html#axzz30vrYTzVG
Tai Ming Cheung, &quoute;China's Entrepreneurial Army&quoute; (Oxford: Oxford University Press, 2001), 185-6
Evan S Medeiros, &quoute;Analyzing China's Defence Industries and the Implications for Chinese Military Modernization&quoute;, RAND Corporation report, 2004
Interim Measures for Implementation of Restructuring of Military Industry Enterprises, 2008
Gary K. Busch, &quoute;The Chinese Military-Commercial Complex&quoute;, Ocnus.net, December 3, 2008, accessed on 2 May 2014 url: http://www.ocnus.net/artman2/publish/Editorial_10/The_Chinese_Military-Commercial_Complex.shtml
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there evidence of unauthorised private enterprise by military or other defence ministry employees? If so, what is the government's reaction to such enterprise?
Chinese civil servants and military personnel are explicitly forbidden from engaging in enterprises or profit-making public institutions even after their service and three-years in retirement (special provisions apply for military personnel, especially reservists and non-commissioned officers). CMC regulations reaffirm that PLA personnel cannot engage in private businesses and stipulate punishments.
However, there is evidence (please refer to cases of corrupt officers in articles by Caixin online and the Economist) of military and MoD employees engaging directly or indirectly (through relatives) in unauthorized private enterprises or using Army assets and personnel for private enterprise (for example using the army's technical units for construction projects). Interviewee 2 noted that cases such as Gu Junshan are indicative of a wider problem rather than a case of a &quoute;few bad apples&quoute;.
Chinese Civil Service Law, 2005
&quoute;The house that Gu built&quoute;, South China Morning Post, August 2015, http://www.scmp.com/news/china/policies-politics/article/1848764/house-gu-built-record-setting-luxury-homes-developed
Military and Security Developments Involving the People's Republic of China in 2013, Annual report to the USA Congress, accessed May 3,2014, url:http://www.defence.gov/pubs/2013_china_report_final.pdf
PLA's Audit Regulations, accessed on 3 May 2014 url: http://news.xinhuanet.com/mil/2007-01/22/content_5634731.htm
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
'Rank and vile', The economist, Feb 14th 2015 http://www.economist.com/news/china/21643225-xi-jinping-flexes-his-muscle-against-army-corruption-rank-and-vile accessed
Interview with Source 2, Journalist, 23 May 2014.
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Do the Defence Ministry, Defence Minister, Chiefs of Defence, and Single Service Chiefs publicly commit - through, for example, speeches, media interviews, or political mandates - to anti-corruption and integrity measures?
Since 2012, the new Chinese administration and members of the CMC have repeatedly committed in public to fight corruption in the Army through various speeches, specialised meetings, anti-corruption campaigns and the adoption of a 5 year plan to fight corruption in the PLA. The most recent high profile address by President Xi was in a speech to the PLA in July in which he urged the army to rid itself of the corrupt influence of Xu Caihou - a former Vice Chair of the CMC.
There is evidence that the personal interventions of President Xi are echoed by other senior military figures, including in internal PLA meetings (reported by Xinhua), and in e.g. numerous press briefings (example included in the sources). Still, the public expressions of commitment do not fully describe the problem or its extent, and only occasionally refer to specific relevant measures that should be taken.
The exposure of high-profile cases such as Guo Boxiong, Xu Caihou, - former Vice Chairs of the CMC, as well as that of Lieutenant General Gu Junshan - head of the PLA's logistics department, and former deputy commander of the PLA Wang Shouye, are all used to reconfirm the party's determination to carry out anti-corruption work in the army. Party and Army leaders are less specific regarding the full extent of corruption in the Army, in order not to jeopardise the public's trust in the PLA and the CCP.
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, 7 April 2014
Xi Jinping speech on eve of Army Day, July 2015, http://news.xinhuanet.com/politics/2015-07/19/c_1115970764.htm
Defence Ministry's regular press conference on Jan. 29, 2015, http://english.chinamil.com.cn/news-channels/china-military-news/2015-01/29/content_6332211.htm
&quoute;Chinese military vows continuous anti-corruption efforts&quoute;, Xinhua, February, 2015, http://www.chinadaily.com.cn/china/2015-02/28/content_19681358.htm
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
&quoute;Chinese army issues a five-year plan on fighting corruption&quoute;, Xinhua , September 23, 2008
&quoute;The CMC forwards decision on further strengthening the military's asset management&quoute;, Chinanews.com, October 25, 2011,
John Garnauld, &quoute;Chinese general to Fight Corruption&quoute; Sydney Morning Herald, January 19, 2012
&quoute;Chinese Official calls for more anti-corruption efforts in military&quoute;, Xinhua, May 23, 2006 Chinese servicemen urged to Cherish correct values&quoute;, Xinhua, February 12, 2008
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are there effective measures in place for personnel found to have taken part in forms of bribery and corruption, and is there public evidence that these measures are being carried out?
The PLA has various legal provisions and penalties for bribery and corruption offenders and provisions for criminal investigation. The largest proportion of relevant military regulations are internal, but the publicly available ones set a clear legal framework regarding bribery and corruption.
The institutions in place to build integrity and tackle corruption fall under the political control of the Party through the CMC. There is no civil and independent oversight of the discipline system outside the CCP/PLA.
Despite many high profile cases emerging in recent years as a result of anti-corruption and auditing campaigns, there is no indication that routine anti-corruption work is improving. During anti-corruption campaigns the government releases numbers and some details regarding cases under investigation but outside these periods there is no publicly available information. Transparency regarding the full extent of corruption in the Army is very limited.
&quoute;Chinese army to intensify anti-graft drive&quoute;, Xinhua, 5 May 2014,
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, 7 April 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
&quoute;Chinese army issues a five-year plan on fighting corruption&quoute;, Xinhua , September 23, 2008
&quoute;Army Party Organizations to Implement the Provisions for Inner-party Supervision&quoute;, 2010
Regulations of the Chinese People's Liberation Army on the Military Service of Officers in Active Service (1994 Amendment)
David Shambaugh, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002), 124-6, 131-6
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: &quoute;Ex-PLA top general Xu Caihou held in cash for rank probe&quoute;, South China Morning Post, published 19th March 2014, updated 20th March 2014, accessed 12th June 2014, url: http://www.scmp.com/news/china/article/1452749/retired-top-pla-general-xu-caihou-held-cash-rank-probe
Suggested score:
Is whistleblowing encouraged by the government, and are whistle-blowers in military and defence ministries afforded adequate protection from reprisal for reporting evidence of corruption, in both law and practice?
In theory, China encourages whistleblowing (Article 41 of the Chinese Constitution provides for whistleblower protection) and offers leniency to officials confessing their involvement in corruption.
The Supreme People's Procuratorate, the Ministry of Audit, the Ministry of Supervision in the central and local levels are using hotlines and websites to gather information on corruption. Similar initiatives have been reported in the PLA, as in 2008, the army set up hotlines for civilians and army personnel to report cases of bribery during soldier-recruitment examinations. These activities have been stepped up in the last couple of years - for example, according to official state media, the Central Commission for Discipline Inspection has opened a new section on its website for the public to report any &quoute;undesirable work styles&quoute;, as well as launching a new mobile phone app, through which the agency claims to receive a daily average of 250 to 300 reports.
The CCP leadership has announced plans for improvement in the legal protection of whistleblowers but these are yet to materialise, although the State Prosecutor's Office has publicly underlined their responsibility to assess the risks for whistleblowers and develop whistleblower protection plans when necessary to prevent and end acts of retaliation.
Still, the analysts referenced here as sources agree that protection and rewards for whistleblowers remain weak. Specific evidence is hard to locate, but according to a 2010 news report on official statistics by the Supreme People's Procuratorate, up to 70% of whistleblowers experience retaliation, and in October 2014, a Chinese investigative journalist exposing corruption cases was sentenced to prison. There are no publicly available statistics for the Army.
&quoute;Anti-corruption agency welcomes whistleblowing&quoute;, Xinhua April 2014, http://news.xinhuanet.com/english/2015-04/14/c_134150079.htm
&quoute;CCDI lures whistleblowers with new app function&quoute;, Xinhua, June 2015, http://news.xinhuanet.com/english/2015-06/21/c_134344407.htm
&quoute;Top Chinese prosecutor guarantees protection for whistleblowers&quoute;, Reuters, October 2014, http://uk.reuters.com/article/2014/10/28/uk-china-corruption-whistleblowers-idUKKBN0IH07720141028
G20 2012 Anti -Corruption Action Plan, 'Protection of Whistleblowers Study on Whistleblower Protection, Frameworks, Compendium of Best Practices and Guiding Principles for Legislation', accessed 5 May 2014, url:http://www.oecd.org/g20/topics/anti-corruption/48972967.pdf
Business Anti-Corruption Portal, China country profile, accessed 5 May 2014, url: http://www.business-anti-corruption.com/country-profiles/east-asia-the-pacific/china/initiatives/public-anti-corruption-initiatives.aspx
Melanie Manion, &quoute;Corruption by design: building clean government in mainland China and Hong Kong&quoute; (Cambridge, MA: Harvard University Press, 2004)
Wendy Wysong, Yu Bing and Charles-Henri Boeringer &quoute;Blowing the Whistle on Corruption in the U.S. and China&quoute;, Corporate Compliance Insights&quoute;, September 29, 2011, accessed on 5 May 2014 url: http://www.corporatecomplianceinsights.com/blowing-the-whistle-on-corruption-in-the-u-s-and-china/
&quoute;China's PLA prevents illegal recruitment and ineligible recruits&quoute;, Xinhua, 11 November 2007
&quoute;70% of the cases investigated by our country's prosecutors come from the masses&quoute; China.org.cn, February 24, 2008
China to protect whistleblowers exposing corruption http://rt.com/business/200379-china-whistleblowers-corruption-protection/ accessed Nov 5 2014
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is special attention paid to the selection, time in post, and oversight of personnel in sensitive positions, including officials and personnel in defence procurement, contracting, financial management, and commercial management?
There is very limited publicly available information on specific regulations for personnel in sensitive positions in the PLA. Occasional reports (like the ones listed above) indicate that specialised training for discipline inspection personnel takes place as part of anti-corruption campaigns. Also, the aforementioned reports and articles point to the procurement and logistics department of the PLA as particularly prone to corruption.
Apart from those stipulated in the aforementioned laws for all servicemen and officers (giving emphasis on good conduct and honesty) there are no publicly available regulations for military personnel in defence procurement, contracting, financial management, and commercial management. But in December 2014, the PLA did announce new rules &quoute;toughening the stance on duty crimes in the areas of construction, and materials and armament procurement.&quoute; According to Xinhua the rules set &quoute;clear preventative measures in 71 clauses under ten chapters&quoute;.
Military Service Law of the People's Republic of China, Law of the People's Republic of China on Officers in Active Service, Interim Regulations of the People's Republic of China on Punishment of Servicemen Who Commit Crimes Contrary to Their Duties url: http://english.chinamil.com.cn/site2/specia%20reports/jzfg/index.htm accessed May 3, 2014
&quoute;PLA to start one-year audit of incomes, expenses of all military personnel&quoute;, February 2015, http://www.globaltimes.cn/content/907293.shtml
&quoute;China Focus: PLA gets tough on duty crimes&quoute;, Xinhua, December 2014, http://news.xinhuanet.com/english/china/2014-12/01/c_133825336.htm
&quoute;Chinese army to intensify anti-graft drive&quoute;, Xinhua, 5 May 2014
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, 7 April 2014
PLA's Audit Regulations, 2007,
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is the number of civilian and military personnel accurately known and publicly available?
Overall, the number of China's overall military personnel and of every major branch (Ground Force, Navy, Air Force, Second Artillery, People's Armed Police) separately is publicly available. There is only scant and irregularly updated information on particular units and services in the army like, for example, the PLA's legal personnel (1342 military lawyers and 25000 legal advisors). According to news reports, there are 20.000 civilians working in the PLA, and following the cuts recently announced by Xi Jinping, the official number of troops is 2m.
&quoute;China 'reveals army structure' in defence white paper&quoute; BBC, 16 April 2013 accessed on 5 May 2014, http://www.bbc.com/news/world-asia-china-22163599
&quoute;Xinhua Insight: China announces troop cut ahead of its first war victory parade&quoute;, Xinhua, September 2015, http://news.xinhuanet.com/english/2015-09/03/c_134586909.htm
PLA civilian personnel will not enjoy the preferential treatment of soldiers, Sina military news, url: http://mil.news.sina.com.cn/2013-12-20/0739755873.html accessed 5 May 2014
Ministry of Defence official website, accessed on 5 May 2014, url: http://www.mod.gov.cn/
Hackett, James (ed.), The Military Balance 2010, International Institute for Strategic Studies, (London: Routledge,2010):398-404
China's 2013 and 2015 White Papers on National Defence,
Regulation on the Civilian Staff of the Chinese People's Liberation Army, 2005
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are pay rates and allowances for civilian and military personnel openly published?
In 2014 the government announced pay increases for military personnel. Pay rates and allowances for both military and civilian personnel are publicly available.
Regulation on the Civilian Staff of the Chinese People's Liberation Army, 2005
Military Wages and Allowances&quoute;, CNLSS.com, January 17, 2011, accessed 5 May 2014, url: http://www.cnlss.com/LssReference/NounExplanation/201101/LssReference_20110117211122_8864.html
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Do personnel receive the correct pay on time, and is the system of payment well-established, routine, and published?
The PLA payment system is well-established, routine and published and personnel receive salaries between the 1st and the 5th day of every month (depending on weekends/bank holidays etc). There is no evidence suggesting that payments of MoD and PLA personnel are delayed or are not made in full.
The basic payment is public, moreover the level of the PLA's professionalism is high and there are no reports on non-discretionary basic pay, rather there is more evidence that the PLA's modernisation has improved the system of payments rather than the opposite. I also looked for any comments on Weibo (Chinese social media) and found nothing on these issues.
Regulation on the Civilian Staff of the Chinese People's Liberation Army, 2005
Military Wages and Allowances&quoute;, CNLSS.com, January 17, 2011, accessed 5 May 2014, url: http://www.cnlss.com/LssReference/NounExplanation/201101/LssReference_20110117211122_8864.html
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there an established, independent, transparent, and objective appointment system for the selection of military personnel at middle and top management level?
Overall the system of appointment combines meritocratic elements along with subjective and political criteria. Formally, the PLA's system of appointments is based on years of service, educational credentials, technical skills and performance. Although PLA observers agree that the Chinese military has standardised the appointment system (thereby increasing meritocracy), patronage and political reliability continue to influence decisions on appointments and promotions.
The Regulations on the Military Ranks of Officers of the Chinese People's Liberation Army stipulate a minimum amount of time in a particular rank before becoming eligible for promotion, a maximum tenure in the same post and specify retirement ages (Articles 17-23). For example, the selection of generals by the CCP top leaders is an established practice.
The system of appointments is public and the sources mentioned demonstrate that patronage and political reliability are important factors - indeed the high profile case of former Vice Chairman of the CMC Xu Caihou centred on the &quoute;auctioning&quoute; of promotions. Since then the official state media has described the need for more regulation on the power of Party leaders in the selection of officers. In February 2015, military authorities issued five documents &quoute;to optimise the selection and management of army officers.&quoute;
aimed at correcting &quoute;improper practices in the selection and appointment of army officials&quoute;. The guidelines reportedly set out clear stipulations on the selection and management of secretaries of senior army officials, requirements for the service time and experience of commanding officers in combat troops, as well as limiting posts for officers' relatives and subordinates to avoid nepotism. And around the same time, the PLA also linked soldiers' weight to promotion.
There is no further publicly available evidence which on how effective these new guidelines are likely to be, and no evident provision for oversight.
&quoute;Xi Jinping promotes 10 more PLA Generals&quoute;,South China Morning Post, 4th August 2013, accessed 5 May 2014 http://www.scmp.com/news/china/article/1294193/xi-jinping-promotes-10-more-pla-general-including-two-hong-kong
&quoute;Chinese military vows continuous anti-corruption efforts&quoute;, Xinhua, February 2015, http://www.chinadaily.com.cn/china/2015-02/28/content_19681358.htm
&quoute;China acts on regulating military personnel selection&quoute;, Xinhua, February 2015, http://news.xinhuanet.com/english/china/2015-02/25/c_134017641.htm
Regulations on the Military Ranks of Officers of the Chinese People's Liberation Army, 1994
Law of the People's Republic of China on Officers in Active Service, 2000
http://english.chinamil.com.cn/site2/special-reports/2006-06/19/content_503650.htm
Kenneth W.Allen and John F Corbett Jr, &quoute;Predicting PLA leader promotions&quoute;. In Civil-Military Change in China: Elites, Institutes and Ideas after the 16th Party Congress, ed. Andrew Scobell and Larry Wotzel (PA: SSI, 2004): 257-273
Justin B. Liang, Sara K. Snyder, &quoute;The People in the PLA: Recruitment, Training, and Education in China's 80-year-old Military&quoute;, Colloquium Brief US Army College and the National Bureau of Asian Research, 2007
Hon S. Chan and Edward Li Suizhou, Civil Service Law in the People's Republic of China: A Return to Cadre Personnel Management&quoute;, Public Administration Review Vol. 67, No. 3 (May - Jun., 2007) p. 383-398
You Ji and Daniel Alderman, &quoute;Changing Civil-Military Relations in China,&quoute; in Roy Kamphausen, David Lai, and Andrew Scobell edited 'The PLA at Home and Abroad: Assessing the Operational Capabilities of China's Military' (Strategic Studies Institute, Carlisle, PA; 2010) 143.
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: Some evidence of appointment not purely on merit under Xu Caihou:
&quoute;Ex-PLA top general Xu Caihou held in cash for rank probe&quoute;, South China Morning Post, published 19th March 2014, updated 20th March 2014,accessed 12th June 2014, http://www.scmp.com/news/china/article/1452749/retired-top-pla-general-xu-caihou-held-cash-rank-probe
Suggested score:
Are personnel promoted through an objective, meritocratic process? Such a process would include promotion boards outside of the command chain, strong formal appraisal processes, and independent oversight.
According to the Regulations of the Chinese People's Liberation Army on the Military Service of Officers in Active Service (article 11), ranks are grouped according to seniority in 4 groups. Party involvement in the process of PLA appointments is extensive and goes through the Army’s political departments, aiming at maintaining the loyalty of officers. Also, there is a trend for more emphasis on meritocratic criteria but as with the previous question, there is evidence that patronage and political influence on the decision of appointments occurs. For senior officers, the promotion evaluation and decisions are made by the cadre department of the General Political Department and then approved by the CMC.
Regulations on the Military Ranks of Officers of the Chinese People's Liberation Army, 1994 (and amendments)
&quoute;Xi Jinping promotes 10 more PLA Generals&quoute;,South China Morning Post, accessed 5 May 2014 url: http://www.scmp.com/news/china/article/1294193/xi-jinping-promotes-10-more-pla-general-including-two-hong-kong
Regulations of the Chinese People's Liberation Army on the Military Service of Officers in Active Service, 1994 (and amendments)
&quoute;Chinese military vows continuous anti-corruption efforts&quoute;, Xinhua, February 2015, http://www.chinadaily.com.cn/china/2015-02/28/content_19681358.htm
&quoute;China acts on regulating military personnel selection&quoute;, Xinhua, February 2015, http://news.xinhuanet.com/english/china/2015-02/25/c_134017641.htm
Kenneth W.Allen and John F Corbett Jr, Predicting PLA leader promotions&quoute;. In Civil-Military Change in China: Elites, Institutes and Ideas after the 16th Party Congress, ed. Andrew Scobell and Larry Wotzel (PA: SSI, 2004): 257-273
Sinodefence.com, accessed on 5 May 2014 url: http://www.sinodefence.com/overview/organisation/gpd.asp
Globalsecurity.org, accessed on 5 May 2014 url: http://www.globalsecurity.org/military/world/china/plan-personel-officercorps-promo.htm
You Ji and Daniel Alderman, &quoute;Changing Civil-Military Relations in China,&quoute; in Roy Kamphausen, David Lai, and Andrew Scobell edited The PLA at Home and Abroad: Assessing the Operational Capabilities of China?s Military (Strategic Studies Institute, Carlisle, PA; 2010) 143.;
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Where compulsory conscription occurs, is there a policy of not accepting bribes for avoiding conscription? Are there appropriate procedures in place to deal with such bribery, and are they applied?
There is no compulsory conscription system and conscripts are enlisted voluntarily upon selection, a process that gives increasing emphasis on highly educated applicants. On the contrary, there have been reports of bribes by people who want to join the Army as it offers a secure career path.
Military Service Law of the People's Republic of China, 1984 (and amendments)
'China Conscription Process' Global Security http://www.globalsecurity.org/military/world/china/plan-personel-enlistedforces-conscripts.htm;
&quoute;Chinese army bans corrupt practice in conscription work&quoute;, Wen Wei Po newspaper, November 16, 2007
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
With regard to compulsory or voluntary conscription, is there a policy of refusing bribes to gain preferred postings in the recruitment process? Are there appropriate procedures in place to deal with such bribery, and are they applied?
Employment in the military is regarded as a secure career path, and as a result there have been reports of bribes during recruitment examinations, which are very selective. There are relevant legal provisions. Article 62 of the Military Service Law prohibits state functionaries from taking bribes while conducting conscription work. Anti-corruption campaigns targeting bribery in conscription have taken place but there is no indication that the problem has been effectively addressed. The case of general Xu Caihou, who has been arrested for, among other things, taking “huge amounts of bribes” in exchange for promotions, suggests that corruption relating to personnel affairs remains a major problem.
Military Service Law of the People's Republic of China, 1984 (and amendments)
&quoute;Chinese army bans corrupt practice in conscription work&quoute; Wen Wei Po newspaper, November 16, 2007
GlobalSecurity.org, accessed 5 May 2014 url: http://www.globalsecurity.org/military/world/china/plan-personel-enlistedforces-conscripts.htm
Another very useful reading would be 'The “People” in the PLA: Recruitment, Training, and Education in China's Military', available online at: http://www.strategicstudiesinstitute.army.mil/pdffiles/pub858.pdf
James Mulvenon, &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014 http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
Opinion: Agree with Comments
Comment: Another very useful reading would be 'The “People” in the PLA: Recruitment, Training, and Education in China's Military', available online at: http://www.strategicstudiesinstitute.army.mil/pdffiles/pub858.pdf
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there evidence of 'ghost soldiers', or non-existent soldiers on the payroll?
There is a significant degree of institutional shielding of the PLA that limits the likelihood of 'ghost soldiers', or non-existent soldiers being on the payroll.
The PLA's recruitment system has been centralized with the adoption of: a) a military service registration system, b) a separate residency ID card system c) a very clear differentiation among the different types of conscripts/reservists and Non Commissioned Officers, as well as their d) recruitment and career advancement paths. Apart from appointments, the CMC also has multiple channels to prevent 'ghost soldiers' entering the payroll and specifically through the political department, the finance department, the discipline inspection department and through the education/training system.
The score on this question is due to an overall lack of transparency and independent oversight of the payment systems, therefore the possibility of 'ghost soldiers' cannot be ruled out.
Justin B. Liang, Sara K. Snyder, &quoute;The People in the PLA: Recruitment, Training, and Education in China's 80-year-old Military&quoute;, Colloquium Brief US Army College and the National Bureau of Asian Research, 2007
Military Service Law of the People's Republic of China (2011 Amendment)
Rules for Applying for and Issuing the Resident Identity Cards of Soldiers and People's Armed Policemen in Active Service, 2008
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are chains of command separate from chains of payment?
The PLA's chains of command and payment are integrated. The basic features of the payment system have remained unchanged since the 1950s. Finance bureaus under the General Logistics Department have been created down to the regiment level and payments follow this structure. Still, technical aspects of the payment system have been modernised.
&quoute;The 'People' in the PLA&quoute;: Roy Kamphausen, Andrew Scobell, Travis Tanner (eds), &quoute;Recruitment, Training, and Education in China's Military&quoute;, Strategic Studies Institute, September 2008
Shambaugh, David, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002),194
Susan M. Pusk, &quoute;The PLA General Logistics Department toward joint logistics support&quoute; in &quoute;The People's Liberation Army as Organization&quoute;, ed. James C. Mulvenon, Andrew N. D. Yang (Santa Monica: RAND, 2002), 251-4
China.org.cn (PRC government portal) The People's Liberation Army (2006), accessed 5 May 2014 url: http://www.china.org.cn/english/features/book/194482.htm
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there a Code of Conduct for all military and civilian personnel that includes, but is not limited to, guidance with respect to bribery, gifts and hospitality, conflicts of interest, and post-separation activities?
There is a code of conduct for military personnel and a separate one for civilian staff. Τhe &quoute;Chinese Soldier's Code of Ethics&quoute; lacks specificity. It stresses loyalty to the regime but also makes special reference to corruption in the form of maxims such as “resist temptation, resist corrosion&quoute; in broad terms. Official announcements and China’s military legislation explicitly and repeatedly outlaw corrupt practices. Nevertheless bribes, facilitation payments (&quoute;red envelopes&quoute;) and the exchange of favours have remained methods of networking and profiteering. Oversight mechanism are no different to corruption control in the PLA in general.
But there is a possibility this may change with the the recent crackdown in such practices across the administration, high level purges, combined with the recently announced focus on audit military personnel expenditure. And at the same time, the PLA has reviewed regulations finding 69 loosely worded areas it termed “vague” and “unclear”, so there is a possibility that application of the code may improve.
&quoute;Soldier's Code of Ethics&quoute; (full text), People's Daily, October 26, 2001, accessed on 5 May 2014 url: http://www.people.com.cn/GB/shizheng/16/20011026/591012.html
&quoute;Xinhua Insight: PLA vows rule of law&quoute;, Xinhua, October 2014, http://news.xinhuanet.com/english/china/2014-10/22/c_133735252.htm
&quoute;China’s military goes to war on corruption&quoute;, FT, July 2015, http://www.ft.com/cms/s/0/62c7cb6c-23c0-11e5-9c4e-a775d2b173ca.html#axzz3m62JKKfT
James Mulvenon &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
John Garnauld, &quoute;Chinese General to Fight Corruption' Sydney Morning Herald, January 19, 2012
Military Service Law of the People's Republic of China, 1984 (and amendments)
Interim Regulations of the People's Republic of China on Punishment of Servicemen Who Commit Crimes Contrary to Their Duties (1982) http://english.chinamil.com.cn/site2/special-reports/2006-04/19/content_459167.htm accessed Nov 5, 2014
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there evidence that breaches of the Code of Conduct are effectively addressed ,and are the results of prosecutions made publicly available?
Apart from a few high-profile cases, there is limited information available regarding the full extent of breaches of the Code of Conduct in the military. High profile cases and results of prosecutions such as that of Admiral Wang Shouye (2005) and Lieutenant General Gu Junshan, deputy head of the General Logistics Department (2012, 2013) are made public, showcasing the PLA's and the CCP's alleged effectiveness in dealing with corruption. Still, information on the actual extent of breaches of codes of conduct is unknown, and the judicial system is far from transparent.
Response to Peer Reviewer 1: Agree with comments, score revised to 2 from 3, though as there are signs that a more thorough root and branch audit of military personnel expenditure may now take place, it's possible that vastly more breaches of the code will be addressed. But here too concerns have been expressed: as Willy Lam notes, studies conducted by Ren Jianming, Head of the Clean Governance Research Center at Beijing’s Beihang University, have shown that up to one third of cadres with the rank of ministers or above have accepted bribes and commissions or helped their close relatives and cronies profit in commercial deals, so it's unclear what criteria will be used to determine the focus of anti-corruption efforts. And the question for the long term is whether this will be a sustained enforcement of the code.
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, 7 April 2014
Willy Lam, &quoute;Growing CCDI Power Brings Questions of Politically-Motivated Purge&quoute;, February 2015, http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=43499#.VfxQp99Viko
James Mulvenon &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
&quoute;The Trial of Zhou Yongkang and China's Rule of Law&quoute;, The Diplomat, June 2015, http://thediplomat.com/2015/06/the-trial-of-zhou-yongkang-and-chinas-rule-of-law/
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
James Mulvenon, &quoute;So Crooked They Have to Screw Their Pants On: New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
&quoute;Is Corruption Within the PLA Diminishing China’s Military Preparedness?&quoute;, The Diplomat, January 2015, http://thediplomat.com/2015/01/is-corruption-within-the-pla-diminishing-chinas-military-preparedness/
&quoute;Former Chinese navy deputy commander stripped of parliamentary post&quoute;, Xinhua, June 29, 2006
Kathrin Hille, &quoute;Chinese General Faces Corruption Probe&quoute; Financial Times, February 1, 2012
Opinion: Agree with Comments
Comment: I generally agree with the mark and comments; however, I have been uncertain about the possibility of assigning a slightly lower mark, meaning 2, due to the widespread assumption among pundits that the addressed cases of bribery remain only the tip of the iceberg - and are likely to be the result of either bureaucratic struggles, or diplomatic bargaining chips to prove China's goodwill over the subject matter.
This seems to be the general belief, even in the absence of evidence, among scholars cited in the assessor's sources, as well as many others I have had a chance to hear at open conferences and events here in London. Nevertheless, in the absence of evidence proving the contrary, a mark of 3 may be the most appropriate.
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does regular anti-corruption training take place for military and civilian personnel?
Normative anti-corruption training is an integral part of Party work in the PLA and political education sessions include anti-corruption rhetoric issues. The government and CMC leadership place great attention on this area of work, but the frequency and content of courses are unclear, though there is evidence of greater evidence on this following the anti-corruption drive.
Anti-corruption education involves extensive normative appeals to patriotism and duty. Practical anti-corruption training targets specialised groups of army officers working in logistics and acquisition. Again information on frequency is unclear but some reports have emerged in state sponsored media.
In September 2010, the CMC published a new set of regulations regarding the operation of anti-corruption supervision bodies. The Discipline Inspection departments in various levels of the PLA organised relevant trainings. In November 2011, the PLA set-up an anti-graft research centre to conduct research and organise specialised workshops and lectures. Some relevant sessions have been publicly announced (please refer to sources) but there is no evidence of large scale training since the 2013 Defence Index.
Li Xuanliang, &quoute;Study and Implement the Spirit of the 17th National Congress in Depth; Promote the Military's Effort to Combat Corruption and Promote Honesty&quoute;, Xinhua, January 16, 2008
James Mulvenon &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012, accessed 5 May 2014http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
&quoute;Chinese Servicemen Urged to Cherish 'Correct Values' &quoute;, Xinhua, February 12, 2008
An Baijie, &quoute;Military takes aim at corruption&quoute;, Global Times, September 28, 2010
Chinese Official calls for more anti-corruption efforts in military&quoute;, Xinhua, May 23, 2006
James Mulvenon, &quoute;So Crooked They Have to Screw Their Pants On:New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
Transparency International, ‘Government Defence Anti-Corruption Index 2013: China Assessment’, http://government.defenceindex.org/sites/default/files/documents/GI-assessment-China.pdf
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there a policy to make public outcomes of the prosecution of defence services personnel for corrupt activities, and is there evidence of effective prosecutions in recent years?
Notable cases of military officials being charged for corruption include Lt-General Xiao Huaiou in 2001, Admiral Wang Shou Ye in 2005, Lt-General Gu Junshan in 2012, Xu Caihou in 2014 and 15 more generals in 2015.
In China, the independence of the judiciary branch is not established. A policy to make public outcomes of the prosecution of defence services personnel for corrupt activities does not appear to exist. As the CCP wants to appear to be fighting corruption, some cases are made public, especially in the last 2 years. There is comprehensive Party control on the publication of information on such cases as corruption is a potential source of embarrassment for the regime and the Army. There is public speculation that the Party leadership selectively exposes cases of corruption, to remove potential political opponents (interview with source 2)
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, 7 April 2014
&quoute;China general charged with corruption&quoute;, Presstv, 1 April 2014
&quoute;The Trial of Zhou Yongkang and China's Rule of Law&quoute;, The Diplomat, June 2015, http://thediplomat.com/2015/06/the-trial-of-zhou-yongkang-and-chinas-rule-of-law/
James Mulvenon &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
James Mulvenon, &quoute;So Crooked They Have to Screw Their Pants On:New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
John Garnaut 'China warned on corruption' The Age http://www.theage.com.au/world/china-warned-on-corruption-20120118-1q6hv.html
Interview with Source 2, Journalist, 23 May 2014.
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are there effective measures in place to discourage facilitation payments (which are illegal in almost all countries)?
Although explicitly forbidden, bribes, facilitation payments (&quoute;red envelopes&quoute;) and favours remain important methods of networking, building political capital and illicit profit both in the Army and the Chinese public sector in general. This is a problem widely acknowledged and frequently discussed also by high-ranking Army officers and political leaders, and now the target of a serious crackdown.
Both in the Chinese Army and in the Public Sector, the government’s capacity to effectively respond to the problem of corruption has been the absence of independent mechanisms to monitor and audit officers. Time will tell whether the change in reporting structure for the PLA's audit agency will improve this. Although anti-corruption laws and regulations exist, there is a repeatedly-stated commitment of the civil and military leadership to tackle the problem (in White Papers), and auditing and information campaigns take place every 2-4 years, nevertheless the institutions in place are open to manipulation and demonstrate weakness in the routine implementation of laws. This is an indication that facilitation payments are not effectively dealt with.
Military Service Law of the People's Republic of China, 1984 (and amendments)
Anti-Corruption And Clean Government White Paper accessed on 3 May 2014 http://news.xinhuanet.com/english2010/china/2010-12/29/c_13669383.htm
PLA's Audit Regulations, accessed on 3 May 2014 url: http://news.xinhuanet.com/mil/2007-01/22/content_5634731.htm
James Mulvenon &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Melanie Manion, &quoute;Corruption by design: building clean government in mainland China and Hong Kong&quoute; (Cambridge, MA: Harvard University Press, 2004)
John Garnauld, &quoute;Chinese General to Fight Corruption&quoute; Sydney Morning Herald, January 19, 2012,
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Do the armed forces have military doctrine addressing corruption as a strategic issue on operations?
In 2008 China issued a 5-year plan to fight corruption in the PLA ( though this is not publicly available) and in 2013, with the new leadership under Xi Jinping, a new campaign has been initiated. In addition to auditing officers and launching anti-corruption campaigns, the CMC has specific policies in place to fight corruption in the case of conscription bribery and assets management. Most of these relevant documents are internal and there is not a publicly available military doctrine addressing corruption as a strategic issue on operations.
&quoute;We Must Hit Hard the Big Tigers&quoute;, Sohu Military affairs blog url: http://mil.sohu.com/s2013/fanfu/, accessed 23 May 2014
Anti-Corruption And Clean Government White Paper, 2010
PLA's Audit Regulations 2007
John Garnauld, “Rotting From Within: Investigating the Massive Corruption of the Chinese military”, Foreign Policy, April 2012
James Mulvenon, &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
&quoute;Chinese army issues a five-year plan on fighting corruption&quoute;, Xinhua, September 23, 2008
&quoute;2008 China to strengthen auditing within Army&quoute;, Xinhua, September 5, 2011
&quoute;Chinese army sets up anti-graft research centre&quoute;, Xinhua (in English), November 3, 2011
Ministry of Foreign Affairs, the People's Republic of China, &quoute;China's defence Expenditure&quoute;, http://www.fmprc.gov.cn/eng/wjb/zzjg/jks/kjlc/gjjk/t410723.htm;
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is there training in corruption issues for commanders at all levels in order to ensure that these commanders are clear on the corruption issues they may face during deployment? If so, is there evidence that they apply this knowledge in the field?
Anti-corruption training for PLA commanders includes political and moral education led by the General Political Department and specialised training for officers in audit and logistics departments. Publicly available information indicates that study sessions for anti-corruption affairs have been carried out almost annually since 2010.
In 2010 the CMC also published internally new regulations on military supervision bodies and discipline inspection departments. In November 2011 the PLA set-up an anti-graft research centre with the aim to conduct research and organise specialised workshops and lectures. There is no publicly available information regarding the outcome of these initiatives in the form of commanders on the field applying practical anti-corruption knowledge.
James Mulvenon, &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014 http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
Li Xuanliang, &quoute;Study and Implement the Spirit of the 17th National Congress in Depth; Promote the Military's Effort to Combat Corruption and Promote Honesty&quoute;, Xinhua, January 16, 2008
&quoute;Chinese Servicemen Urged to Cherish 'Correct Values' &quoute;, Xinhua February 12, 2008
An Baijie, &quoute;Military takes aim at corruption&quoute;, Global Times, September 28, 2010
&quoute;They Have to Screw Their Pants On:New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
David Shambaugh, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are trained professionals regularly deployed to monitor corruption risk in the field (whether deployed on operations or peacekeeping missions)?
There is no evidence of trained professionals deployed in the field to monitor corruption risk outside 1) political commissars conducting political/propaganda work and 2) UN specialists deployed on UN peacekeeping operations in which the PLA participates.
He Yin, &quoute;China's Changing Policy on UN Peacekeeping Operations&quoute;, Institute for Security and Development Policy (2007) Taylor , Ian, &quoute;The Future of China's Overseas Peacekeeping Operations&quoute;, China Brief Volume: 8 Issue: 6 (2008)
United Nations Peacekeeping official website, accessed May 6, 2014, url: http://www.un.org/en/peacekeeping/operations/current.shtml
UN Conduct and Discipline Unit website, accessed May 6, url: http://cdu.unlb.org
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are there guidelines, and staff training, on addressing corruption risks in contracting whilst on deployed operations or peacekeeping missions?
Internally published guidelines regarding the responsibilities of military supervision bodies on battling corruption exist. Apart from UN regulations on peacekeeping missions, the Chinese military regulations available online in full-text form do not include specialised regulations on contracting whilst on deployed operations or peacekeeping missions. There has been no developments in this field since the previous Defence Index.
United Nations Peacekeeping official website, accessed May 6, 2014, http://www.un.org/en/peacekeeping/operations/current.shtml
UN Conduct and Discipline Unit website, accessed May 6 2014, http://cdu.unlb.org
Yin He, &quoute;China's Changing Policy on UN Peacekeeping Operations&quoute;, Institute for Security and Development Policy (2007)
Taylor, Ian, &quoute;The Future of China's Overseas Peacekeeping Operations&quoute;, China Brief Volume: 8 Issue: 6 (2008)
Transparency International, ‘Government Defence Anti-Corruption Index 2013: China Assessment’, http://government.defenceindex.org/sites/default/files/documents/GI-assessment-China.pdf
Opinion: Not Qualified
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Private Military Contractors (PMCs) usually refer to companies that provide operational staff to military environments. They may also be known as security contractors or private security contractors, and refer to themselves as private military corporations, private military firms, private security providers, or military service providers.
The use of PMCs by Chinese companies and consular services is a new trend (roughly since 2010) that is rapidly gaining momentum along with the expansion of China's presence abroad. Currently Chinese security companies operate domestically for the protection of individuals but very few offer services in military operations. The most well-known examples are Huawei International Security Management and Genghis Security Services. Chinese PMCs offer services in Iraq, Africa and Asia, protecting Chinese companies operating in the petroleum and energy sectors. China has signed the Montreux Document, a non-legally binding agreement that includes a proposed code of conduct and best practices for private military and security firms. However, the NPC has not passed a relevant law and there are no media reports regarding PMCs conduct nor any evidence of corrupt activities. As a result Chinese PMCs refer to vague international standards in order to regulate the conduct of their personnel.
&quoute;China's private security companies go overseas&quoute;, Financial Times, Nov 28, 2013 url: http://video.ft.com/2871941523001/Chinas-private-security-companies-go-overseas/World
&quoute;Crouching guard, hidden danger for China security firms&quoute;, SCMP, 21 Jan 2013 http://www.scmp.com/news/china/article/1130179/crouching-guard-hidden-danger-china-security-firms
Andrew Erickson, &quoute;Gabe Collins Enter China's Security Firms&quoute;, The diplomat, February 21, 2012, accessed on 6 May 2014 url: http://the-diplomat.com/2012/02/21/enter-china%E2%80%99s-security-firms/
David Isenberg, &quoute;Changing the Rules with PMC&quoute;, Huffington Post, November 3 2010, accessed on 6 May 2014 url: http://www.huffingtonpost.com/david-isenberg/changing-the-rules-with-p_b_778523.html
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the country have legislation covering defence and security procurement and are there any items exempt from these laws?
Two national laws (primary legislation) on public procurement have been enacted by the National People’s Congress (NPC): the Tendering Law (2000), which provides detailed rules on tendering procedures, and the Government Procurement Law (2003) which does not apply to military procurement, but states (article 86) that the regulations for military procurement will be formulated separately by the Central Military Commission.
Both military procurement and supervision of this are centralised and fall under the responsibility of the CMC. The General Armaments Department is then responsible for the procurement of weaponry and equipment while the General Logistics Department is in charge of the procurement of materials and supplies. The general framework on procurement is established by the &quoute;People's Liberation Army Equipment Procurement Regulations&quoute;, while the General Armament Department and the General Logistics Department have issued regulations regarding defence (weapons/armaments) and mundane procurement respectively.
The CMC's Equipment Procurement Regulations cover “weaponary, “protective equipment”, “emergency equipment” and “other equipment projects”, and require procurement officials to be “qualified” and to be “regularly trained and assessed”. The regulation sets out an annual planning cycle and the process by which procurement planning is conducted (see question 11).
Mirroring the Government Procurement Law, the regulations set out five procurement methods: public invitation/open tender, invited bidding, competitive negotiation, single-source procurement, and inquiry about quotations – alongside any other method approved by the General Armament Department. circumstances”.
Further guidance was issued following these regulations by the General Armaments Department in 2003 which framed the responsibility of the General Armament Department in managing procedures, and Headquarters in managing the process of procurement, or implementation. This has though been updated with more recent guidance aimed at strengthening competition, which sets the underlying principles as fairness and transparency, and stipulates that equipment procurement departments must not intentionally limit and avoid competition, or hinder fair competition, and includes a requirement to justify why any subsystems or supporting contracts associated with single source procurement have not been opened up to competitive tendering. The guidance also widens up scope of companies eligible to tender, beyond those officially on the &quoute;List of equipment manufacturing units,&quoute; to companies that have demonstrated the technical capability but also appropriate qualifications to undertake confidential weaponry research and production
China launched an official military weapons procurement website in early 2015, which state run media described as an effort to &quoute;better guarantee transparency in arms procurement&quoute; and comes under the General Armament Department of the PLA.
Secret programs are exempt from the above laws and there is no transparency regarding the actual extent of such programs.
&quoute;Government Procurement Law and Policy: Comparative Summary&quoute;, Library of Congress, 2010, accessed 6 May 2014 url: http://www.loc.gov/law/help/govt-procurement-law/comparative.php
&quoute;China launches weapons procurement website&quoute;, Global Times, January 2015, http://www.globaltimes.cn/content/899920.shtml
Military equipment procurement website, http://www.weain.mil.cn/
Evan Medeiros, &quoute;Analyzing China's defence Industries and the Implications for Chinese Military Modernization&quoute;. Randm (2004), http://www.rand.org/pubs/testimonies/2005/RAND_CT217.pdf
Government Procurement Law of the People's Republic of China, 2002,
“Equipment procurement regulations” (excerpts), Central Military Committee, issued October 2002, published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/486982.html
“Opinion on the strengthening of competition in equipment procurement” (excerpts), General Armament Department, issued February 2009, published on the Military Equipment Procurement website in 2014, http://www.weain.mil.cn/zcfg/jdbbfg/487224.html
“Rules on equipment procurement methods and procedures” (excerpts), General Armament Department issued December 2003, published on the Military Equipment Procurement website in 2014, http://www.weain.mil.cn/zcfg/jdbbfg/487219.html
“Rules on competitive equipment procurement” (excerpts), General Armament Department, issued July 2014 and published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/491986.html
General Logistics Department (2002-2003): Provisions on the Management of the Procurement of Military Materials Provisions on the Management of Inviting Tenders for Military Materials, Provisions on the Management of Procurement Contracts for Military Materials, Provisions on the Management of the Price Review Work of Procurement Agencies of Military Materials Provisional Measures for the Management of Centralized Procurement Payment of Military Materials, Projects and Services Provisions on Auditing the Procurement of Military Materials, Projects and Services, Ministry of National Defence of the PRC, accessed 6 May 2014, http://www.mod.gov.cn/affair/2011-01/06/content_4249947_4.htm
Evron, Yoram, &quoute;China's Military Procurement Approach in the Early 21st Century and Its Operational Implications&quoute;, Journal of Strategic Studies, 35:1, (2012)
David Shambaugh, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002), 238-241
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
The procurement cycle process is outlined in the CMC Equipment Procurement regulations, which sets out an annual procurement planning cycle encompassing provisional plans for the subsequent two years, and a more specific plan for the current year, based on the previous years’ forecasting. Each plan is supposed to include a rationale, along with the details of the equipment, quality, price, funding plans to be procured, as well as the method of procurement, and manufacturing facility. Procedures for conducting the five different types of procurement processes are laid out in a further regulation from the General Armaments department, including for example the formation and operation of tendering boards.
The CMC regulation also sets out the process by which all this occurs - the General Armaments Department is supposed to give notice to the relevant headquarters and armed service equipment departments, which are then required to submit plans by the end of March. All the plans are then examined, amalgamated and transmitted back down the chain as a single plan by the end of June. Updates and proposed adjustments are requested by the middle of October, which are again consolidated and passed back down the chain, with a final evaluation of implementation supposed to be submitted to the GAD by the end of January.
But there is no evidence of any oversight and the details information on the plans are not publicly available. The PLA website (plap.cn) does publish announcements and invitations for bidding in regard to mundane procurement (non weaponry related supplies etc). Mundane procurement above 500.000 RMB needs to be made public through this website, and there is evidence of improvement in the details provided for mundane procurement announcements on Plap.cn since the last Defence Index.
Weaponry procurement over of 300, 000,000 RMB is also supposed to be put to open tender, and the General Armaments Department has recently started publicising some procurement contracts on a new website (weain.mil.cn). Authorities report a reduction in procurement costs as a result of &quoute;open tendering and reformed processes&quoute;. But this is difficult to verify, particularly in the absence of any form of independent oversight of the entire process, and nor is it clear what proportion of contracts are being advertised this way.
No detail over how all this operates in practice is available, no oversight mechanisms exist aside from the PLA's audit agency, and it's difficult to ascertain the extent to which formal rules of procurement are followed. A recent study by Gong and Zhou (see sources) set out some of the gaps between the formal rules and practice in Chinese procurement, which might only be expected to be more pronounced in protected world of the PLA.
PLA Procurement website, www.plap.cn, accessed on 6 May 2014
Military procurement website, http://www.weain.mil.cn/
“Equipment procurement regulations” (excerpts), Central Military Committee, issued October 2002, published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/486982.html
“Rules on equipment procurement methods and procedures” (excerpts), General Armament Department issued December 2003, published on the Military Equipment Procurement website in 2014, http://www.weain.mil.cn/zcfg/jdbbfg/487219.html
&quoute;PLA weaponry procurement costs &quoute;significantly&quoute; less&quoute;, Xinhua, April 2015, http://news.xinhuanet.com/english/2015-04/09/c_134136949.htm
Gong, T. and Zhou, N. (2015), Corruption and marketization: Formal and informal rules in Chinese public procurement. Regulation & Governance, 9: 63–76. doi: 10.1111/rego.12054, http://onlinelibrary.wiley.com/doi/10.1111/rego.12054/full#rego12054-note-0009
Ministry of National defence of the PRC, accessed 6 May 2014, url: http://www.mod.gov.cn/affair/2011-01/06/content_4249947_4.htm
&quoute;China launches weapons procurement website&quoute;, Global Times, January 2015, http://www.globaltimes.cn/content/899920.shtml
China's defence White Paper, 2004
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002), 15-16
David Shambaugh, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002), 238-241
Opinion: Agree with Comments
Comment: Useful sources also include Jeffrey Lewis, &quoute;PLA Procurement Website&quoute; http://lewis.armscontrolwonk.com/archive/835/pla-procurement-website; Mulvenon et al., &quoute;Modernizing China’s Military: Opportunities and Constraints&quoute;, RAND, 2005
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
The CMC supervises military procurement without any independent scrutiny from the NPC or other organisation. The General Logistics Department is in charge of mundane/non-weapon procurement and the General Armaments Department is responsible for weaponry.
The general framework on procurement is established by the &quoute;People's Liberation Army Equipment Procurement Regulations&quoute;, while the General Armament Department and the General Logistics Department have issued regulations regarding defence (weapons/armaments) and non-weapon procurement respectively. The discipline inspection committees and political departments throughout the hierarchy are also involved in anti-corruption efforts.
Anti-corruption efforts by the formal procurement oversight mechanisms (for all types of procurement) have produced important high-profile corruption cases in the last 8 years, but there is no information regarding the full extent of the problem and the extent to which politics has played a role in which cases have come to light. In 2012, the Political Commissar of the General Logistics Department (in charge of non-weapon procurement) described corruption in the GLD as &quoute;huge&quoute;, &quoute;visible&quoute; and &quoute;reachable&quoute; (Garnault, 2012). Gu Junshan, the former deputy chief of the PLA's general logistics department was recently officially charged with corruption and bribery.
There have been no announcements regarding corruption cases involving the procurement of weapons, though the official state media have reported that the overall cost of procurement had reduced with the advent of open tendering. In any case, the overall degree of transparency is very low
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Yoram Evron, &quoute;China's Military Procurement Approach in the Early 21st Century and Its Operational Implications&quoute;, Journal of Strategic Studies, 35:1, (2012): 82
John Garnaut, &quoute;Chinese General to fight Corruption&quoute;, the Sydney Morning Herald, January 19, 2012,
Liu Rongpu, &quoute;The characteristics of military economic crimes and prevention&quoute;, Economic Management, No 11 (2010): 49-50
&quoute;Army Party Organizations to Implement the Provisions for Inner-party Supervision&quoute;, 2010, regulations accessed at the PLA website on 6 May 2014, url: http://www.mod.gov.cn/policy/jsgz.htm Yan Feng
Liu Yi, &quoute;Supervision and Management of Military Project Acquisition Contract&quoute;, Military Economic Research, No 5 (2003): 67-8
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002): 15-16
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are actual and potential defence purchases made public?
A number of analysts (Keck, Wong, Li, Shambaugh, Perlo-Freeman) point out that a considerable proportion of China's military budget is not publicly announced (estimates range between 25-50% of the official budget), which hinders transparency in procurement.
Actual and potential defence procurement is made known only in broad terms, through the biannual defence white papers of the PLA and sporadic reports on major weaponry procurement plans (fighter jets, submarines etc).
Some procurement has been opened for bidding, and transparency has been improved with the setting up of procurement websites, where bidding calls are made public for purchases made by both the GLD and PLA regional commands.
Response to Peer Reviewer: I disagree with score 2 suggested by PR 1, this is neither partly nor fully justified in all cases reviewed.
Military and Security Developments Involving the People's Republic of China in 2013, Annual report to the USA Congress, accessed May 2,2014, url:http://www.defence.gov/pubs/2013_china_report_final.pdf
&quoute;China’s Submarine Procurement & Its Implications&quoute;, CSIS Asia Program, 21 October 2013, accessed 6 May 2014 url: http://cogitasia.com/chinas-submarine-procurement-its-implications/
Roggeveen, Sam, &quoute;New weapons reveal China's technological ambitions and limits&quoute;, The Interpreter,
8 January 2014 http://www.lowyinterpreter.org/post/2014/01/08/New-weapons-reveal-Chinas-technological-ambitions-and-limits.aspx
Zachary Keck, &quoute;China’s defence Budget: A Mixed Bag&quoute;, The diplomat, March 08, 2014
Edward Wong, &quoute;China Announces 12.2% Increase in Military Budget&quoute;, The New York Times, March 5 2014
PLA Procurement website, www.plap.cn, accessed on 6 May 2014
Ministry of National Defence of the PRC, accessed 6 May 2014, url: http://www.mod.gov.cn/affair/2011-01/06/content_4249947_4.htm
China's defence White Paper, 2004
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002), 15-16
David Shambaugh, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002), 238-241
Evron,Yoram, &quoute;China's Military Procurement Approach in the Early 21st Century and Its Operational Implications&quoute;, Journal of Strategic Studies, 35:1, (2012)
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011)
China's 2010 White Paper on National defence,
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002), 15-16
Boyd, Dallas, Lewis, Jeffrey and Pollack Joshua (2010): &quoute;Advanced Technology Acquisition Strategies of the People's Republic of China&quoute;, defence Threat Reduction Agency, USA, accessed 14th June 2014, url: http://www.fas.org/irp/agency/dod/dtra/strategies.pdf
Opinion: Disagree
Comment: The Military Balance 2014, pp. 205-10
Suggested score: 2
Opinion: Agree with Comments
Comment: There is evidence that China’s efforts to harness dual-use technologies acquired by the private sector are for use in PLA weapons. The principal sources of these technologies are foreign purchases, acquisition of Western companies, and technology transfers as part of commercial activities. These are not considered military defence purchases, hence not subject to the PLA procurement regulations and audits.
Boyd, Dallas, Lewis, Jeffrey and Pollack Joshua (2010): &quoute;Advanced Technology Acquisition Strategies of the People's Republic of China&quoute;, defence Threat Reduction Agency, USA, accessed 14th June 2014, url: http://www.fas.org/irp/agency/dod/dtra/strategies.pdf
Suggested score:
What procedures and standards are companies required to have - such as compliance programmes and business conduct programmes - in order to be able to bid for work for the Ministry of Defence or armed forces?
The procurement system is heavily regulated and licensed by the state. Chinese companies (mainly State owned Enterprises) have been required to have licenses in order to bid for procurement, conduct research and produce arms and equipment, though new guidance from the General Armaments Department aimed at encouraging more competition have slightly widened the definition of eligible companies beyond those officially on the &quoute;List of equipment manufacturing units,&quoute; to companies that have demonstrated &quoute;technical capability but also have appropriate qualifications to undertake confidential weaponry research and production&quoute;. There is no reference to a requirement for non compliance programmes as part of the licensing system.
On 8 June 2011, China announced a list of 1600 companies that may bid for defence procurement work. 900 of these companies are reported as &quoute;civil manufacturers&quoute; while the rest belong to the state industrial complex. The list of licensees is jointly formulated by the General Armaments Department and the State Administration of Science, Technology and Industry for National Defence (SASTIND).
The regulations are detailed and technical in nature. Two forms of license exist, A and B, with the first referring to more technologically sophisticated items. The regulations stipulate close supervision of companies participating in procurement by the state (article 27), self-inspection mechanisms and regular inspections by the SASTIND local offices, and a system of labelling documents with serial numbers. Licensees must report on internal operation issues (article 28) and cash flows from abroad and fall under strict confidentiality regulations (article 29). More recent regulations (2013) stipulate centralised procurement for purchases of items over 500.000 RMB and of services over 200.000 RMB.
During the bidding process, the government does make reference to the need for companies to avoid corruption. There is no evidence of discrimination against companies on the grounds of integrity.
Measures for the Implementation of the Scientific Research and Production Licensing of Arms and Equipment, 2010
Regulation on Licensing Administration of Scientific Research and Production of Arms and Equipment, 2008
“Rules on competitive equipment procurement” (excerpts), General Armament Department, issued July 2014 and published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/491986.html
“New General Logistics Department procurement rules centralized procurement for sums more than 500,000 RMB”, QQ News, accessed 6 May 2014 , url: http://news.qq.com/a/20130708/009971.htm
‘’China publishes first list of military equipment suppliers as part of procurement reforms’’ People’s Daily online, June 8, 2011, , accessed 6 May 2014 , url: http://english.people.com.cn/90001/90776/90786/7402939.html
China Opens Military Procurement to Civil Bidders&quoute;, Voice of America , June 8, 2011, accessed 6 May 2014, url: http://www.voanews.com/cantonese/news/20110608CN-1010195CHINA-MILITARY-123446069.html
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are procurement requirements derived from an open, well-audited national defence and security strategy?
The Chinese government occasionally announces its decision to invest in large-scale military hardware such as an air craft carrier and fighter jets. Having said that, the PLA provides partial details on the army's acquisition planning through relevant White Papers. Publicly available information emerges occasionally in the form of PLA-approved media reports and the White Papers that the government publishes approximately every two years since 1998. These provide information on the general foreign policy and defence priorities of the PRC. Procurement of major weaponry reflects these priorities, mainly through the enhancement of China's power projection capacity.
For example, the 2010 White Paper discusses the modernisation of the PLA and its ability to operate in China's periphery, but provides very limited information on procurement (there is reference to C4ISR). As Collins and Erickson point out, the following major purchases are not mentioned: 1) Anti-Ballistic missile System (ABS) and anti-ship ballistic missile (ASBM) development, 2) aircraft carrier development, 3) space-based intelligence, surveillance, and reconnaissance (ISR) capabilities 4) the J-20 air fighter development program. Information on these purchases appear in the state-controlled press. It must also be noted that these purchases of high-tech weaponry fall in line with China's defence priorities.
The 2015 White Paper provides some reasonably clear indications of the direction of travel (as detailed in question 11), if again no details.
Timothy Heath, “China’s defence White Paper: A New Conceptual Framework for Security”, China Brief, Volume: 13 Issue: 9 April 25, 2013, accessed 6 May 2014, url:http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews[tt_news]=40784&cHash=7cdb20872966140532416d3f7eafe6fd#.U2oEhS_KnZ4
Dennis J. Blasko, “The 2013 defence White Paper in Perspective”, China Brief Volume: 13 Issue: 9, April 25, 2013, accessed 6 May 2014, url: http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews[tt_news]=40783&tx_ttnews[backPid]=25&cHash=5f29f63e88be8de07b9d204df6d99801#.U2oFDi_KnZ4
Yoram Evron, &quoute;China's Military Procurement Approach in the Early 21st Century and Its Operational Implications&quoute;, Journal of Strategic Studies, 35:1, (2012): 82
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011)
Collins, Gabe and Erickson, Andrew, &quoute;China defence White Paper 2010: Better transparency, but what key developments were left out of the discussion?,&quoute; China SignPost, No. 32 (2011)
Michael S. Chase, &quoute;China's 2010 National defence White Paper: An Assessment&quoute;, China Brief Volume: 11 Issue: 7 (2011), accessed 6 May 2014, url: http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews[tt_news]=37839&tx_ttnews[backPid]=25&cHash=09c1a6ae537662a6085a5cce93f2050e
Defence White Paper, 2015.
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are defence purchases based on clearly identified and quantified requirements?
The General Armaments Department (weaponry procurement) and the General Logistics Department (GLD) (non-weapons procurement) provide identified and quantified requirements for procurement and the process is supervised by audit offices. Announcements for routine procurement are published and these set precise requirements.
There is no information regarding the effectiveness and fairness of the system and to what extent purchases are driven by objective needs or the planning cycle detailed in previous question is unclear. As demonstrated by the high profile case of former deputy head of the GLD, General Gu Junshan, corruption in the procurement cycle remains a serious problem.
Recent regulations (2013) stipulate centralised procurement for the purchase of items over 500.000 RMB and of services over 200.000 RMB for non-weapons procurement in a move that expands central oversight over military procurement.
James Mulvenon &quoute;The Only Honest Man? General Liu Yuan Calls Out PLA Corruption&quoute;,
China Leadership Monitor, no. 37 2012 accessed 5 May 2014 http://media.hoover.org/sites/default/files/documents/CLM37JM.pdf
“New General Logistics Department procurement rules stipulate centralized procurement for sums more than 500,000 RMB”, QQ News, 8 July 2013, accessed 6 May 2014 , url:
http://news.qq.com/a/20130708/009971.htm
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
&quoute;Chinese ex-navy deputy commander jailed for life over fraud&quoute;, Ta Kung Pao, December 22, 2006
Former Chinese navy deputy commander stripped of parliamentary post&quoute;, Xinhua, June 29, 2006
Yan Feng, Liu Yi, Supervision and Management of Military Project Acquisition Contract&quoute;, Military Economic Research, No 5 (2003): 67-8
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002): 15-16
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011):8
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
There is no transparency of procurement decision-making processes. Single-sourcing and distribution of procurement contracts among state-controlled industries is a widespread practice (Perlo-Freeman, 2011; Li and Yin, 2002). Approximately only 20% of all procurement is conducted through competitive bidding.
Since 2011 there are 1,600 licensed companies (around 50% state-owned) allowed to bid for contracts, but there is no information on the fairness of competition. Some initiatives demonstrate commitment in this regard. Online systems (www.plap.cn & www.wein.mil.cn) allow companies to bid for PLA contracts and provides detailed public announcements. Also, recent regulations (2013) stipulate centralised procurement for purchases of items over 500.000 RMB and of services over 200.000 RMB, by the General Logistics Department - a move that expands central oversight over military procurement decisions. However, although officially procurement above 500.000RMB (approximately 80.000USD ) needs to take place through public bidding, it remains unclear what percentage of routine procurement actually falls under this category.
The General Armaments Department also issued some further guidance on competitive procurement in 2014, which also includes rules around how to negotiate single sources contracts, presumably aimed at increasing amount of procurement that goes through competitive tendering. This guidance sets out principles underpinning procurement as fairness and transparency, and stipulates that procurement departments must not intentionally limit and avoid competition, or hinder fair competition, and requires procurement departments to justify why subsystems or supporting contracts associated with single source procurement have not competitively tendered. The guidance also widens up scope of companies eligible to tender, beyond those officially on &quoute;List of equipment manufacturing units,&quoute; to companies that have demonstrated technical capability but with appropriate qualifications to undertake confidential weaponry research and production. It also has includes clauses aimed at &quoute;protecting competition&quoute; , including for example allowing compensation (proportion of large contracts, subcontracts, or financial) to be awarded to those companies that lose tenders, where conditions of &quoute;stable competition&quoute; do not exist.
PLA Procurement websites, www.plap.cn and www.wein.mil.cn
“Equipment procurement regulations” (excerpts), Central Military Committee, issued October 2002, published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/486982.html
“Rules on competitive equipment procurement” (excerpts), General Armament Department, issued July 2014 and published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/491986.html
“Opinion on the strengthening of competition in equipment procurement” (excerpts), General Armament Department, issued February 2009, published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/487224.html
“New General Logistics Department procurement rules stupulate centralized procurement for sums more than 500,000 RMB”, QQ News, 8 July 2013, accessed 6 May 2014 , url:
http://news.qq.com/a/20130708/009971.htm
Eric Hagt, &quoute;Emerging Grand Strategy for China's defence Industry Reform,&quoute; in Roy Kamphausen, David Lai, and Andrew Scobell edited The PLA at Home and Abroad: Assessing the Operational Capabilities of China's Military&quoute;, (Strategic Studies Institute, Carlisle, PA; 2010) pp. 494-5;
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002), 15-16
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011): 7
&quoute;Curbing Corruption in Public Procurement in Asia and the Pacific: Progress and Challenges in 25 Countries&quoute;, ADB/OECD Anti-Corruption Initiative for Asia and the Pacific (2006): 35-37
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
There is no independent (non-PLA) supervision of CMC tender boards.
The General Armaments Department and the State Administration for Science, Technology and Industry for National defence (SASTIND, under the Ministry of Industry and Information Technology) are involved in supervision for weaponry procurement. The introduction of the SASTIND (previously known as COSTIND) was aimed at increasing civil oversight of the process. COSTIND was not transparent and became a source of corruption (Jecks, 1998) and there is no evidence that SASTIND has improved the situation.
There are relevant regulations governing the operation of tender boards (see sources above) whenever these are used (in non-weapons procurement). Little public information is available on this process though the official state media indicated in February &quoute;more regulation on the power of Party leaders in the PLA was needed, and decisions on the selection of officers, major expenditure, construction projects and material procurement, should be made collectively by the Party committee rather than by individual Party leaders&quoute;. There is no publicly available information on the frequency of audits.
Routine procurement decisions and supervision are entrusted to the General Logistics Department. It is noted here that in 2013-14 former deputy head of the GLD General Gu Junshan and some of his deputies have been arrested under corruption charges.
The PLA Audit Agency supervises mundane procurement down to the unit level.
Regulations on the Quality Management of Weapons and Military Equipment, 2010
Law of the People's Republic of China on Product Quality, 2000
&quoute;Chinese military vows continuous anti-corruption efforts&quoute;, Xinhua, February 2015, http://news.xinhuanet.com/english/2015-02/28/c_134026969.htm
Tendering and Bidding Law, 2000
The Government Procurement Law of the People's Republic of China, 2002
Various Rules on Probity in Governance for Member Leaders and Cadres of the CCP, 2010
Eric Hagt, &quoute;Emerging Grand Strategy for China's defence Industry Reform,&quoute; in Roy Kamphausen, David Lai, and Andrew Scobell edited The PLA at Home and Abroad: Assessing the Operational Capabilities of China's Military (Strategic Studies Institute, Carlisle, PA; 2010) pp. 494-5;
Li Yongfu, Yin Wei, &quoute;Credit, Transparency and Competition in Military Procurement&quoute;, Military Economic Research, No 8 (2002), 15-16
Han Dongxue, Yang Renyong, Luo Mingzheng, &quoute;Analysis on the Problem of Asymmetric Information in Military Procurement&quoute;, Logistics Management, Vol. 27 No.105 (2004):25-27
Shambaugh, David, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002): 185, 239-40
Jencks, Harlan “COSTIND is Dead, Long Live COSTIND! Restructuring China’s defence Scientific, Technical, and Industrial Sector”, in James C. Mulvenon, Richard H. Yang (eds) The People’s Liberation Army in the Information Age, Rand corporation, 1998 http://www.rand.org/content/dam/rand/pubs/conf_proceedings/CF145/CF145.chap5.pdf
accessed December 10, 2014
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
Legislation on government procurement, including military procurement, stipulates regulations against collusion. Punishments are imposed according to the extent of the fraud and include fines, procurement license suspension and revocation, and criminal investigation. Having said that, due to the fact that these companies are mainly State-Owned Enterprises (SOEs), pre-bidding agreements are frequent. The actual extent of collusion is unknown but from the cases made known there is always official involvement (Army Officers, CCP functionaries, state-owned military companies). Is should be noted here, that once cases of corruption such as the ones involving Generals Gu Junshan and Xu Caihou (2013-2014) and Wang Shouye (2006) are made known, they are quickly stripped of their posts in the Army and the Party, while a legal investigation and a trial take place.
PLA Procurement website, www.plap.cn
Tendering and Bidding Law, 2000
Anti-monopoly Law, 2007
The Government Procurement Law of the People's Republic of China, 2002
Regulations on the Quality Management of Weapons and Military Equipment, 2010
Robert Rothery, &quoute;China's Legal Framework for Public Procurement&quoute;, Journal of Public Procurement, Vol 3, No 3 (2003): 10-11
James M. Zimmerman, &quoute;China law deskbook: a legal guide for foreign-invested enterprises&quoute; (IL:American Bar Association, 2010), 354-356
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Former Chinese navy deputy commander stripped of parliamentary post&quoute;, Xinhua, June 29, 2006
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are procurement staff, in particular project and contract managers, specifically trained and empowered to ensure that defence contractors meet their obligations on reporting and delivery?
The supervision of the technical, legal and financial aspects of procurement according to defence contracts is supervised by the State Administration for Science, Technology and Information of National defence and the General Armaments Department (weaponry) and the General Logistics Department (mundane procurement).
Information regarding the training and qualifications of personnel is limited. In addition there is no information on the problems and staff shortages of the departments involved.There is evidence of increased attention by the PLA on the training of personnel involved in procurement. Measures to increase the competence of personnel include in-house trainings, educational visits abroad and an increase in university-educated and technical personnel. These measures have improved the personnel's ability to oversee the quality of contracts. Still, as recent corruption cases best exemplify (Gu Junshan and Xu Caihou), unwarranted pressure from high positions in the PLA is a continuous problem.
Dennis J. Blasko, &quoute;Chinese Military Logistics: the GLD System&quoute;, China Brief Volume: 4 Issue: 19 (2004)
Tendering and Bidding Law, 2000
The Government Procurement Law of the People's Republic of China, 2002
Regulations on the Quality Management of Weapons and Military Equipment, 2010
Ministry of National Defence of the PRC, procurement regulations, accessed 6 May 2014, url: http://www.mod.gov.cn/affair/2011-01/06/content_4249947_4.htm
Susan M. Puska, &quoute;The People's Liberation Army (PLA) General Logistics Department (GLD): Toward Joint Logistics Support&quoute;, in The People's Liberation Army as Organization, eds James C. Mulvenon, Andrew N. D. Yang (VA:RAND, 2002), 264-265
Harlan Jenks, &quoute;The General Armament Department&quoute;, in 'The People's Liberation Army as Organization', eds James C. Mulvenon, Andrew N. D. Yang (VA:RAND, 2002): 282-283 Yan Feng, Liu Yi, Supervision and Management of Military Project Acquisition Contract&quoute;, Military Economic Research, No 5 (2003): 67-8
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
James Mulvenon, So Crooked They Have to Screw Their Pants On: New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
Chinese Official calls for more anti-corruption efforts in military&quoute;, Xinhua, May 23, 2006
Former Chinese navy deputy commander stripped of parliamentary post&quoute;, Xinhua, June 29, 2006
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
The MoD and the CMC have established a legal framework that allows companies to complain about perceived malpractice in both non-weapon procurement and weaponry procurement. This was recently expanded upon in 2014 guidance from the General Armaments Department, and includes procedures for appeal initially at Headquarters level but then ultimately to the General Armament Department.
There are no available statistics or news articles on whether companies actually use this channel and how often. As in the case of whistle-blowing, proving a complaint is difficult and there might be retribution in the form of exclusion from future procurement. Sustaining good relations with the government and the army is crucial and there is a clear incentive to not choose the very uncertain and potentially dangerous legal path to complain.
Measures for Handling the Complaints of Government Procurement Suppliers, 2004
Tendering and Bidding Law, 2000
Anti-monopoly Law, 2007
Tender Law Malpractice Measures, 2009
The Government Procurement Law of the People's Republic of China, 2002
“Rules on competitive equipment procurement” (excerpts), General Armament Department, issued July 2014 and published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/491986.html
Regulations on the Quality Management of Weapons and Military Equipment, 2010
Robert Rothery, &quoute;China's Legal Framework for Public Procurement&quoute;, Journal of Public Procurement, Vol 3, No 3 (2003): 10-11
James M. Zimmerman, &quoute;China law deskbook: a legal guide for foreign-invested enterprises&quoute; (IL:American Bar Association, 2010), 354-356
Wendy Wysong, Yu Bing and Charles-Henri Boeringer &quoute;Blowing the Whistle on Corruption in the U.S. and China&quoute;, Corporate Compliance Insights, September 29, 2011, accessed on 6 May 2014, 2012 url: http://www.corporatecomplianceinsights.com/blowing-the-whistle-on-corruption-in-the-u-s-and-china/
&quoute;Curbing Corruption in Public Procurement in Asia and the Pacific Progress and Challenges in 25 Countries&quoute;, ADB/OECD Anti-Corruption Initiative for Asia and the Pacific (2006): 35-37
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
What sanctions are used to punish the corrupt activities of a supplier?
Punishments are imposed according to the extent of the fraud and include fines, procurement license suspension and revocation, and criminal investigation which may lead to the death penalty. Apart from a few cases involving high-ranking officers, there is very limited public information on the corrupt activities of suppliers to the PLA, and sanctions against them. Judging from the important cases of corruption involving the General Logistics Department, it is evident that punishments (and criminal investigations) do not adequately deter illegal activities.
Measures for Handling the Complaints of Government Procurement Suppliers, 2004
Tendering and Bidding Law, 2000
Anti-monopoly Law, 2007
Tender Law Malpractice Measures, 2009
The Government Procurement Law of the People's Republic of China, 2002
Regulations on the Quality Management of Weapons and Military Equipment, 2010
Robert Rothery, &quoute;China's Legal Framework for Public Procurement&quoute;, Journal of Public Procurement, Vol 3, No 3 (2003): 10-11
Li Xuanliang, &quoute;All Units of the Armed Forces to Deal With Commercial Bribery,&quoute; Xinhua, August 2, 2006.
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011)
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
Willy Lam, “Why Commander-in-chief Xi Jinping’s anti-corruption campaign can’t get traction in the PLA”, Consortium of defence Analysts, 2013 accessed May 2, 2014: http://cofda.wordpress.com/2013/10/07/why-chinas-anti-corruption-campaign-is-blocked-in-the-pla/
John Garnauld, “Rotting From Within: Investigating the massive corruption of the Chinese military”, Foreign Policy, April 2012
James Mulvenon, So Crooked They Have to Screw Their Pants On: New Trends in Chinese Military Corruption&quoute;, Hoover Institution, China Leadership Monitor No. 19 (2006)
Chinese Official calls for more anti-corruption efforts in military&quoute;, Xinhua, May 23, 2006
Former Chinese navy deputy commander stripped of parliamentary post&quoute;, Xinhua, June 29, 2006
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
When negotiating offset contracts, does the government specifically address corruption risk by imposing due diligence requirements on contractors? Does the government follow up on offset contract performance and perform audits to check performance and integrity?
Offset contracts for government, non-PLA, procurement are regulated by China's Company Law, Contract Law and the specialised regulations which also stipulate audits of foreign companies operating in China. China has started the process of acceding to the Agreement on Government Procurement
China does not have a formal offset agreements policy or legislation, although it consistently seeks technology transfer, licensed production, licensed assembly and participation in R&D programs. Offset contracts in the military are very common as the PLA seeks to increase its high-tech warfare capabilities. Examples include the production of Russian SU-27 air-fighters. The effectiveness of the supervision of offset contracts and the imposition of anti-corruption controls for military equipment (almost exclusively with Russian contractors) is not transparent.
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
&quoute;Committee on Government Procurement moves ahead on multiple accessions&quoute;, WTO, February 2015, https://www.wto.org/english/news_e/news15_e/gpro_11feb15_e.htm
Offset Policy Summaries, Australian Ministry of defence, 2010, accessed 6 May, 2014. (No longer accessible online.)
Max Verbitz, &quoute;Russian-Chinese Military Cooperation: Can a Bear Trust a Dragon?&quoute;, - Boston University Institute for the Study of Conflict, Ideology and Policy, Perspective, Volume XVI Number 3 (May 2006),
Dennis J. Blasco, &quoute;Evaluating Chinese Military Procurement from Russia&quoute;, Joint Forces Quarterly, Autumn/Winter (1997-8): 92
Owen E. Herrnstadt, &quoute;Offsets and the lack of a comprehensive US Policy: What Do Other Countries Know That We Don't?&quoute;, Economic Policy Institute, Briefing Paper No 201 (2008)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the government make public the details of offset programmes, contracts, and performance?
As explained in question 70, there is a very low level of transparency regarding China's offset contracts in the military sector. Articles and reports in the state sponsored media occasionally emerge but they only refer to the signing of such agreements (mainly with Russian suppliers), basic details regarding the type of weaponry with limited or no information regarding the clauses of offset contracts and performance of suppliers.
&quoute;China buys fighter jets and submarines from Russia&quoute;, BBC, 25 March 2013
Max Verbitz, &quoute;Russian-Chinese Military Cooperation: Can a Bear Trust a Dragon?&quoute;, Boston University Institute for the Study of Conflict, Ideology and Policy, Perspective, Volume XVI Number 3 (May 2006)
Dennis J. Blasco, Evaluating Chinese Military Procurement from Russia, Joint Forces Quarterly, Autumn/Winter (1997-8)
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
“Undermining Global Security: the European Union’s arms exports,” Amnesty International, February 1st 2004, accessed 14th June 2014, url:http://www.amnesty.org/en/library/info/ACT30/003/2004
“EADS to Co-develop EC175 Helicopter With China,” defence Industry Daily, published December 7th 2005, accessed 14th June 2014, url: http://www.defenceindustrydaily.com/eads-to-codevelop-ec175-helicopter-with-china-01585/
“FC-1 / JF-17 Multirole Fighter Aircraft,” SinoDefence.com, published 13 March 2009, accessed 14 June 2014, http://www.sinodefence.com/airforce/fighter/fc1.asp
Reuben, Johnson: “China eager for Russian air technology,” Washington Times, published May 4 2010, accessed 14]June 2014, http://www.washingtontimes.com/news/2010/may/04/china-eager-for-russian-air-technology/print/
Solovyov, Dmitry: “China buys air defence systems from Russia,” Reuters, published April 2nd 2010, accessed 14 June 2014, http://www.reuters.com/article/idUSTRE6310WG20100402
Kerr, Paul: “Ukraine Admits Missile Transfers,” Arms Control Today, May 2005, accessed 14 June 2014, http://www.armscontrol.org/act/2005_05/Ukraine
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: China has offset agreements from Russia, Ukraine, the USA and Pakistan and EU countries. Details of these contracts, programmes and performance are not made public.
“Undermining Global Security: the European Union’s arms exports,” Amnesty International, February 1st 2004, accessed 14th June 2014, url:http://www.amnesty.org/en/library/info/ACT30/003/2004
“EADS to Co-develop EC175 Helicopter With China,” defence Industry Daily, published December 7th 2005, accessed 14th June 2014, url: http://www.defenceindustrydaily.com/eads-to-codevelop-ec175-helicopter-with-china-01585/
“FC-1 / JF-17 Multirole Fighter Aircraft,” SinoDefence.com, published March 13th 2009, accessed 14th June 2014, url: http://www.sinodefence.com/airforce/fighter/fc1.asp
Reuben, Johnson: “China eager for Russian air technology,” Washington Times, published May 4th 2010, accessed 14th June 2014 url:http://www.washingtontimes.com/news/2010/may/04/china-eager-for-russian-air-technology/print/
Solovyov, Dmitry: “China buys air defence systems from Russia,” Reuters, published April 2nd 2010, accessed 14th June 2014, url:http://www.reuters.com/article/idUSTRE6310WG20100402
Kerr, Paul: “Ukraine Admits Missile Transfers,” Arms Control Today, May 2005, accessed 14th June 2014, url:http://www.armscontrol.org/act/2005_05/Ukraine
Suggested score:
Are offset contracts subject to the same level of competition regulation as the main contract?
China does not have a formal military offset agreements policy or legislation, and the PRC's competition law does not make special provisions for military offset contracts. Due to an embargo by the West, Russia is the main supplier of the technologically advanced weaponry and know-how to China. Offset contracts are the result of political negotiations rather than open competitive bidding (Blasco,1998; Verbitz, 2006). There are no official announcements regarding competition for offset contracts.
Competition (Anti-Monopoly) Law of the PRC, 2008
Offset Policy Summaries, Australian Ministry of defence, 2010, accessed 6 May 2014 but no longer accessible at http://www.defence.gov.au/deu/docs/Offsets_Database.xls
Dennis J. Blasco, Evaluating Chinese Military Procurement from Russia, Joint Forces Quarterly, Autumn/Winter (1997-8): 92
Military and Security Developments Involving the People's Republic of China in 2015, Annual report to the USA Congress, http://www.defence.gov/Portals/1/Documents/pubs/2015_China_Military_Power_Report.pdf
&quoute;China 'buys fighter jets and submarines from Russia&quoute;, BBC, 25 March 2013
Max Verbitz, &quoute;Russian-Chinese Military Cooperation: Can a Bear Trust a Dragon?&quoute;, - Boston University Institute for the Study of Conflict, Ideology and Policy, Perspective, Volume XVI Number 3 (May 2006)
Dominik Kimla, &quoute;Military Offsets & In-country country Industrialisation Market Insight&quoute;, Frost & Sullivan analysis, March 2013
&quoute;Guns and sugar&quoute;, The Economist, 25 May 2013, http://www.economist.com/news/business/21578400-more-governments-are-insisting-weapons-sellers-invest-side-deals-help-them-develop
Opinion: Agree with Comments
Comment: Dominik Kimla, &quoute;Military Offsets & In-country country Industrialisation Market Insight&quoute;, Frost & Sullivan analysis, March 2013
&quoute;Guns and sugar&quoute;, The Economist, May 25th 2013, http://www.economist.com/news/business/21578400-more-governments-are-insisting-weapons-sellers-invest-side-deals-help-them-develop
Suggested score:
Opinion: Agree
Comment:
Suggested score:
How strongly does the government control the company's use of agents and intermediaries in the procurement cycle?
The operation of agents in government procurement is legal. Their conduct is regulated by a legal framework established by China's Procurement Law, the Tendering and Bidding Law and the Project Administration and Supervision Instructions.
In relation to military procurement, the General Logistics Department and the General Armaments Department have established special measures in the military procurement process (only partially available to the public). Agents need to be licensed and there are regulations preventing them from employing family members of party leaders and employees in these departments. There are no provisions for independent oversight of agents.The GLD and GAD are entrusted with decisions on procurement contracts and monitoring the legality of the process and the conduct of agents. However, it appears that agents engage in bribery and illicit methods as demonstrated by recent corruption scandals in the media. The actual extent of corruption is unclear due to the lack of transparency. No specific measures to tackle this problem have been announced since the last Defence Index.
Zheng Xuanyang, Wang Tong, Li Weihua, &quoute;Principal Agent Analysis in Military Procurement, Logistics and Material Handling&quoute;, No 1 (2010)
Han Dongxue, Yang Renyong, Luo Mingzheng, &quoute;Analysis on the Problem of Asymmetric Information in Military Procurement&quoute;, Logistics Management, Vol. 27 No.105 (2004)
Robert Rothery, China's Legal Framework for Public Procurement, Journal of Public Procurement, Vol 3, No 3 (2003):7-10, 16-17
Project Administration and Supervision Instructions, 2001
Tendering and Bidding Law, 2000
Regulations on the Quality Management of Weapons and Military Equipment, 2010
The Government Procurement Law of the People's Republic of China, 2002
Various Rules on Probity in Governance for Member Leaders and Cadres of the CCP, 2010
&quoute;How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Transparency International, ‘Government Defence Anti-Corruption Index 2013: China Assessment’, http://government.defenceindex.org/sites/default/files/documents/GI-assessment-China.pdf
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
There is no transparency regarding details of procurement agreements on weaponry and weapon-related materials. Non-weapon procurement is more transparent as announcements providing detailed specifications and contact information are uploaded on the Plap.cn website. There is clear difference in the level of transparency among these two different types of procurement, though this may be shifting slightly with the launch of a new weapons procurement platform (www.weain.mil.cn) Still, as recent scandals in the GLD (see case of Gu Junshan who amassed considerable wealth as deputy head of the GLD) have indicated, non-weapon procurement is still very vulnerable to corruption.
No information is normally available on financing packages, though CMC Procurement Regulations on stipulate that funding details should be included in the draft procurement plans of submitted for approval to the General Armaments Department, indicating that some level of internal evaluation is conducted.
PLA Procurement websites, www.plap.cn and www.weain.mil.cn
“Equipment procurement regulations” (excerpts), Central Military Committee, issued October 2002, published on the Military Equipment Procurement website, http://www.weain.mil.cn/zcfg/jdbbfg/486982.html
Samuel Perlo-Freeman, &quoute;Measuring Transparency in Military Expenditure: The Case of China&quoute;, The Defence Transparency Project, University of California (2011):8
David Shambaugh, &quoute;Modernizing China's Military: Progress, Problems and Prospects&quoute; (Berkley: California University Press, 2002), 240-1
‘’China publishes first list of military equipment suppliers as part of procurement reforms’’ People’s Daily online, June 8, 2011, , accessed 6 May 2014 , url: http://english.people.com.cn/90001/90776/90786/7402939.html
&quoute;China Opens Military Procurement to Civil Bidders&quoute;, Voice of America , June 8, 2011, accessed 6 May 2014 , url: http://www.voanews.com/cantonese/news/20110608CN-1010195CHINA-MILITARY-123446069.html
“Xi Jinping goes hunting for the 'tigers' of the PLA”, SCMP, April 7, 2014
“How a PLA General Built a Web of Corruption to Amass Fortune”, Caixin Online, 16 January 2014
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
Does the government formally require that the main contractor ensures subsidiaries and sub-contractors adopt anti-corruption programmes, and is there evidence that this is enforced?
There is no legal differentiation between contractors and subcontractors. Control over companies involved in procurement is centralised and they are all formally expected to acquire licenses which include anti-corruption provisions, though these cannot really be described as &quoute;anti-corruption programmes&quoute;. Self-inspection provisions and control mechanisms from government bodies apply. There is no transparency and no publicly available information on enforcement.
Measures for the Implementation of the Scientific Research and Production Licensing of Arms and Equipment, 2010
Regulation on Licensing Administration of Scientific Research and Production of Arms and Equipment, 2008
Regulations on the Quality Management of Weapons and Military Equipment, 2010
Zheng Xuanyang, Wang Tong, Li Weihua, &quoute;Principal Agent Analysis in Military Procurement, Logistics and Material Handling&quoute;, No 1 (2010)
Han Dongxue, Yang Renyong, Luo Mingzheng, &quoute;Analysis on the Problem of Asymmetric Information in Military Procurement&quoute;, Logistics Management, Vol. 27 No.105 (2004)
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree
Comment:
Suggested score:
How common is it for defence acquisition decisions to be based on political influence by selling nations?
There is no evidence suggesting that China's purchase of weapons from abroad (mainly Russia) is politically influenced by the selling nation. Due to an embargo by the West, Russia is the main supplier of the technologically advanced weaponry and know-how to China. In the last 10 years, China has made only one major purchase of weaponry from Russia, which is justified by its strategic objectives. As China aims at self-reliance on military technology, there have been accusations from Russian suppliers that the PLA is copying technologies without permission. The PLA has also purchased military technologies from former Soviet republics and Israel. There is no evidence that these purchases are based on political influence rather than strategic and economic considerations. In addition, China has become the world's fourth biggest supplier in major weapons. There is evidence of the opposite dynamic, China influencing smaller nations in defence acquisition.
&quoute;China gains ground as arms supplier, but US stays on top, SIPRI says&quoute;, DW, 13 March 2014, accessed 7 May 2014, url: http://www.dw.de/china-gains-ground-as-arms-supplier-but-us-stays-on-top-sipri-says/a-17500773
&quoute;China buys fighter jets and submarines from Russia&quoute;, BBC, 25 March 2013
&quoute;China To Buy Russian Fighters, Subs&quoute;, Defence News, 25 March 2013 accessed 7 May 2013 url: http://www.defencenews.com/article/20130325/DEFREG03/303250012/China-Buy-Russian-Fighters-Subs
Yoram Evron, &quoute;China's Military Procurement Approach in the Early 21st Century and Its Operational Implications&quoute;, Journal of Strategic Studies, 35:1, (2012): 84-6
Dennis J. Blasco, &quoute;Chinese Army Modernization: An overview&quoute;, Military review, September-October (2005): 71-72
David Shambaugh, “Modernizing China’s Military: Progress, Problems and Prospects” (Berkley: California University Press, 2002): 261-271
Dennis J. Blasco, &quoute;Evaluating Chinese Military Procurement from Russia&quoute;,Joint Force Quarterly, Autumn-Winter (1997-98): 92
Opinion: Agree
Comment:
Suggested score:
Opinion: Agree with Comments
Comment: China has also bought military technology and weapons from the EU (despite the embargo), Pakistan and the USA. There is no evidence that these purchases were an outcome of the selling nation's influence, although they imply the existence of political motives. For instance due to the growing rivalry between India and China, China has signed military-to-military agreements of cooperation with Pakistan.
Boyd, Dallas, Lewis, Jeffrey and Pollack Joshua (2010): &quoute;Advanced Technology Acquisition Strategies of the People's Republic of China&quoute;, defence Threat Reduction Agency, USA, accessed 14th June 2014, url: http://www.fas.org/irp/agency/dod/dtra/strategies.pdf
Suggested score:
In theory, China's defence policy is supervised by the National People's Congress (NPC) though there is no permanent parliamentary defence committee. The Ministers of Defence and Foreign Affairs, and the Central Military Committee (CMC) -China's supreme military body- are formally appointed by the NPC. Again in theory, the NPC can remove from office all CMC members and military affairs ministers.
In practice, there is no evidence to indicate that the NPC has the authority to substantially affect China's defence policy as decided by the CMC. The largest delegation of NPC representatives are military officers (approximately 10% of NPC delegates). They get involved in discussions regarding the PLA's modernization but their actual impact as NPC delegates is miniscule. There has been no change in this respect during the 2013, 2014 and 2015 annual sessions of the 12th NPC (2013-2018).
Response to Peer Reviewer 1: Agree with comments and revision of score to '0' from '1'.