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China: Commission of Science, Technology, and Industry for National Defense (COSTIND) and Defense Industries

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Publication Date: December 1997

Publisher(s): Library of Congress. Congressional Research Service

Series: 96-889

Topic: Military and defense (Military equipment and weapons)

Coverage: China


Congressional interest in the Chinese military, or People’s Liberation Army (PLA), has increased as a result of the March 1996 tensions in the Taiwan Strait, continuing allegations of Chinese proliferation of technology useful in weapons of mass destruction, and reports that some Chinese defense-related corporations have circumvented U.S. export controls to acquire dual-use technology. The Commission of Science, Technology, and Industry for National Defense (COSTIND), an important, high-level PLA organization, plays a role in China’s weapon programs, sales of civilian goods, acquisition of military technology, and arms sales and export controls. The purpose of this CRS Report is to examine the origins and command, roles, and influence of COSTIND.

COSTIND was founded in July 1982 through the consolidation of multiple organizations concerned with weapon programs. COSTIND answers to two superior organizations: the State Council (the highest governmental organ) and the Central Military Commission (CMC) of the Chinese Communist Party (the highest command of the military). However, COSTIND belongs to the People’s Liberation Army (PLA) organizational system commanded by the CMC. COSTIND’s new director is Lieutenant General Cao Gangchuan, who has the bureaucratic rank of a minister.

Under COSTIND’s centralized coordination, China’s military facilities and defense industries were to be made more efficient and effective. COSTIND is in charge of military research and development, testing, and production in the military and in the defense industries. China’s defense industries comprise six state-owned sectors: electronics, nuclear, aviation, space/missiles, ordnance, and shipbuilding. There are now large state-owned corporations in these defense-industrial sectors, and they engage in both military and civilian business.

Over time, COSTIND has acquired further — perhaps, competing — roles as China’s interests evolved. In addition to overseeing weapon development and production, COSTIND has also facilitated civilian commercial deals, increased weapon and technology acquisition from foreign countries, promoted foreign arms sales, and taken on export control and nonproliferation roles.

COSTIND has exercised considerable influence. Such influence includes political influence through personal access to top leaders, foreign policy influence through some control over foreign arms sales, military influence over weapon modernization, and economic influence through responsibility for the defense industries, which are part of the debilitated state-owned sector. Recently, however, there has been a debate about whether CONSTIND’s influence has weakened since the 1980s. China’s economic reforms, leadership changes in COSTIND, and continuing systemic problems in the defense sector may have eroded COSTIND’s influence. The future of COSTIND will be tied to whether the current director can resolve the problems in equipping the PLA with modern weapons and continuing to restructure China’s immense defense-industrial complex.