China to give more access to private firms in arms sector

Beijing to reduce curbs on pvt enterprise, incentivise state-owned defence cos to increase use of parts made by private firms

China has decided to give more access to private companies to its huge arms sector so that they can develop and produce weapons and other military equipment, a media report said on Monday.

"The government will open more fields in the defence sector to private enterprises and lower the entry threshold for them," said Xu Dazhe, director of the State Administration of Science, Technology and Industry for National Defense, which oversees China's defence industries.

"The administration will gradually reduce restrictions on private businesses in the military equipment industry and offer more favourable policies to encourage state-owned defence contractors to increase the use of parts made by private companies," China Daily quoted Xu as saying.

The remarks came as the First Military and Civilian Industries Integration Expo opened in Beijing. The expo began on Thursday.

The media report said that China has been opening the defence market to private enterprises gradually since 2005. Businesses can bid for contracts from the military after obtaining four government-issued licenses that cover confidentiality and technological capability.

Xu Zhanbin, deputy director of the administration, said that nearly 1,000 private companies have been given permission to develop and produce weapons or other military equipment, accounting for about 40 percent of defense equipment contractors in China.