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Ordnance Industry’s Reform, Supervision and Government Support in the Developed Countries: Experience and Inspirations

2017-02-17

Ordnance Industry’s Reform, Supervision and Government Support in the Developed Countries: Experience and Inspirations

By Ma Mingjie, DRC

2016-12-30

The developed countries have introduced competition in national defense market. Through restructuring and reform of state-owned enterprises (SOEs), the market has attracted private capital and enhanced the vitality and competitiveness of national defense industry. For most developed countries, private enterprises and public companies are the major force of ordnance industry.

First, property right structure of ordnance industry. Viewing from the world practice, based on the principles of non-competing with the people for profits, safety and optimal insurance, developed countries focus their management of national ordnance enterprises mainly on highly specialized or highly confidential equipment production fields including various types of nuclear weapons, explosives and powders, core chambers, and equipment repair and maintenance. These countries adopt different ways of reform, mainly including the restructuring of state-owned and privately-operated companies, privatization and public listing. In each country, the government controls the key enterprises through strategic measures and golden share system.

Second, market supervision and maintenance of production capacity in special industries. By means of law and administration, the government keeps the competitiveness in the supplier market through antimonopoly, anti-unfair competition and review of mergers and acquisitions. The government adopts distinctive policies to protect special industries relating to national defense including ammunition and gunpowder.

Third, inspirations to China. 1. We need to strengthen strategic coordination, and achieve the deep integration of military strategic needs with defense industry development requirements. 2. We need to promote classified reform of the military industry group and encourage socialization and specialization of non-core business and supporting production. 3. We need to provide special support for special industries such as propellant explosives. 4. We need to intensify antimonopoly review. 5. We need to enhance the further integration of military and civilian industries with relevant reforms.