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This essay examines the impact of China's Military-Civil Fusion (MCF) strategy on the country's military procurement and argues that its main contribution lies in increasing China's access to advanced military-related foreign know-how and technologies.
main argumentAdopted in 2015, the MCF strategy is the last phase of a prolonged national effort to overcome the embedded hindrances of China's military procurement system by harnessing the civilian sector to that end. The strategy is designed to inject new technologies and R&D into China's military-industrial complex, increase its efficiency, and improve the bargaining position of the People's Liberation Army (PLA) vis-à-vis its suppliers throughout the various phases of procurement. A close examination of the expressed objectives of the MCF, its policy tools, and implementation reveals that (1) the strategy concentrates more on R&D than all other procurement phases, (2) efforts to reduce bureaucratic and functional barriers between the defense and civilian industry sectors face many obstacles, and (3) MCF's greatest achievements lie in transferring advanced military-related expertise from foreign sources to China's military establishment.
Although the MCF strategy narrows China's military-technology gap with other leading world powers, it does not address the embedded inefficiencies of the country's military procurement system. Hence, its overall effect on the PLA's readiness and warfighting capability is limited.
China's MCF has drawn negative attention from other countries—particularly the U.S.—for the tight relations between the military, civilian industry, and academia. Such criticism affects China's political, technological, and economic relationships with these countries and may have detrimental consequences for relevant Chinese sectors.
MCF's record may provide another demonstration of China's difficulty in injecting market forces into its state-owned sector as well as in addressing problems of inefficiency through measures other than economic liberalization.