Mainland China`s Defense Industry in the Context of the Central-Local Relationship

Abstract

In the late 1970s, Beijing initiated a defense industry conversion which aimed to cut back surplus capacity and encourage the transition of military production lines to civilian product manufacturing. In this process, a side-effect has taken hold; namely, local civilian enterprises in interior provinces have been integrated with large defense industries as satellite contractors. Moreover, these large defense enterprises have become core enterprises. These developments may help the central government to alleviate the chronic localism which emerged in the 1980s.