Study the growth of IT in national defense and estimate the future growth path.

China's military information technology and the development of national defense industry.

China's army is undergoing a C4ISR (Command, Control, Communication, Computer and Intelligence) revolution, which is characterized by the transformation from optical fiber, satellite, microwave and secure high-frequency radio to digital secure communication. The speed and depth of transformation cannot be explained by the traditional defense industry reform. In fact, all these changes started with a model called "Digital Iron Triangle". The three vertices of the iron triangle are: commercial information technology companies, government research and development institutions and investment departments, and the military. The edge connecting the three vertices is an important business relationship between the government and military research institutions for a long time.

This digital iron triangle relationship is similar to Japan's national technology strategy, which is coordinated by high-level government organizations and provides important funds, but it also includes the characteristics of marketization, dynamics, rapidity and international market orientation of private enterprises. China has been trying its own technology strategy, but its success in information technology and shipbuilding industry may prompt it to integrate the information industry into global research, development and production, rather than relying solely on its own technical strength.

The digital iron triangle marks an important progress in the military strategy of communication development. In the previous model, companies such as China Electronic Systems Engineering Company (CESEC) of the General Staff Department of China People's Liberation Army built commercial networks and acquired technology for the army as nominal companies. In contrast, private companies such as Huawei represent the emerging digital iron triangle model, and the military, government departments and research institutions provide funds and personnel for these companies. These companies have obtained the maximum credit loan, that is, the research and development funds of the government's 863 program, and actively seek to occupy the global market. The military benefits as a beneficiary customer and research partner.

Most information technology and electronics companies in China are commercial companies. Compared with the traditional defense industry, emerging information technology companies do not have the institutional burden of inefficient state-owned large-scale defense industry: surplus manpower, outdated industrial infrastructure, lack of funds and lack of advanced technology. However, information technology companies have established new facilities in different places and hired capable high-tech personnel. The employees of the company are encouraged by the market incentive mechanism and share dividends, and can introduce the latest foreign technology.

Through the digital iron triangle mechanism, the army supports the use of private enterprises to carry out military research, because they are more capable of engaging in military technology research than military enterprises, which makes the army a research and development partner of enterprises and a special user of new products. Civilization is the real transformation mechanism of the core of the digital iron triangle, because it introduces commercial and profit-seeking motives, improves the overall technical level of China, and indirectly benefits the information technology level of the army. Two important technical trends further promote this cooperation: First, commercial off-the-shelf equipment, such as computer network switches and routers, is increasingly used in military communications. Second, China's status as a global producer of integrated circuit products has improved, enabling China's army to use advanced microelectronic equipment, which is the core of advanced military sensors and weapon systems.

In the above two trends, the commercial finished products, especially the commercial finished products of communication equipment, make the Chinese army profitable as soon as possible, which is manifested in the expansion of military optical fiber computer networks. In contrast, the development of microelectronics technology is slower, because the design of microelectronic components is generally aimed at specific military purposes and cannot directly benefit from global commercial products. But at the same time, China's commercial semiconductor manufacturing technology is increasingly advanced, which provides the army with the necessary production capacity and is conducive to the realization of the army's design concept in a confidential domestic environment.

Although the Digital Iron Triangle has benefited China Army in some important information technology fields, its operational performance is uncertain. For example, the realization of secure communication may improve the security of military communication, but the performance of the system in real combat environment cannot be absolutely determined unless it is tested in military conflict.

Information Technology Department and China's National Defense Modernization: A New Model

The relationship between information technology and national defense modernization.

Information technology is regarded as the core of future wars, and sometimes it is labeled as military revolution. China's army has shown great interest in military reform both in theory and practice, so as to formulate asymmetric strategies to meet the challenges brought by possible conflicts with Taiwan Province Province, the United States and its allies. Theoretically, China scholars have published a large number of works on China's military reform and influence, which are increasingly combined with the ongoing theoretical revolution of the army and rapidly promote technology research and development. In practice, the primary task of China's military reform is the overall modernization of C4ISR infrastructure. The rapid development of the army from Morse code and high-frequency radio communication to optical cable, digital microwave and satellite communication has improved the army's combat and communication safety, and provided a prospect for realizing the synthesis with future conventional weapons.

An article published in the People's Liberation Army Daily 1997 describes the general working principle of China's information technology revolution: first, the transformation from analog technology to digital technology; Second, the transition from cable to optical cable; The third is the transformation from mechanical electronic switch to program-controlled switch; Fourth, the transition from a single functional terminal to a multi-functional terminal; Fifth, the transformation from single-task network to multi-task network; Sixth, the transformation from manual operation to automation and intelligent network management. In 2000, some innovative principles were added to the military reform strategy, which reflected the continuous maturity of China's information technology industry: first, static communication technology changed to mobile communication technology; The second is the transformation of ground-to-air communication technology to space communication technology; Third, ensure the transformation of communication technology to command and control technology and information warfare technology; Fourthly, the narrowband communication network is transformed into a broadband communication network; Fifth, the regional or cross-regional communication network is transformed into a global communication network; Sixth, transform the specialized military communication network into a network composed of private network and public network; Seventh, the transformation from military communication network to military information network.

Such a grand innovation plan can only be realized through the special efforts of high-level government, government industrial bases and R&D institutions. Politically, China leaders have always recognized the importance of modernization of military C4ISR system. Comrade * * *, the former national leader, has always stressed that "electronic systems are crucial to economic construction and national defense communications". In summing up the experience of the Gulf War in 199 1, * * further demonstrates that "military electronic systems are of great significance to government security and must be given priority". However, during the Gulf War, the electronics department of China's defense industry did not produce the most advanced or relatively advanced equipment comparable to that of western countries, and the business information technology department of China basically did not exist.

Information technology defense industry sector

China's information technology department is advancing the modernization of China's C4ISR. Although China's information technology industry is business-oriented, its success is supported by government R&D institutions, including those related to the national defense industry and military units. In this sense, the information technology field, especially those enterprises that supply C4ISR finished equipment and related products to the army, should be regarded as the emerging defense industry field in China, but these enterprises are very different from the traditional defense industry.

China's traditional national defense industry consists of ammunition, aviation, aerospace, shipbuilding, nuclear weapons, electronic products and other military departments. After 25 years of national defense industry reform (starting from the early 1980s), the military sector has been transformed into an enterprise, which is responsible for selling civilian and military products to domestic and international markets. For many years, the Commission of Science, Technology and Industry for National Defense (CIDT) has been a military entity, coordinating the research, development and procurement relationship between the military and defense industrial enterprises. After the reform of 1998, the commission of science, technology and industry for national defense became the local organization responsible for managing and controlling the national defense industry.

Vitality of information technology industry system

To analyze the vitality of the information technology industry sector, we must first divide the national defense part of the information technology industry sector into two categories. The first category is a sub-sector that provides commercial information technology systems such as routers, switches and computers for the military. Such companies mainly include Huawei, ZTE, Datang, Julong Company and Wuhan Research Institute. These companies are private enterprises separated from government research institutes. They adopted the successful models of the United States, Japan and Taiwan Province Province, established multinational companies through lower labor costs, better services and R&D reinvestment, entered foreign markets and occupied international markets. This model is unheard of in other industrial fields in China. In 2000, 22.9% of China's $474 billion foreign trade (about $654.38+008.5 billion) was related to electronic products, and it is estimated that this share will increase to $260 billion to $270 billion in 2005.

The second type of information technology industry is those sub-industries with low commercial feasibility, including the developers of special defense electronic systems for radar and special weapon subsystems. The scientific research institutes and the commercial name companies associated with them are more like the traditional national defense industry, and they have the same institutional problems: they cannot develop the market as easily as commercial enterprises, because the national defense electronics department cannot obtain the latest commercial skills and technologies through the market. They also don't have the attractive export vitality of commercial enterprises, because China's defense electronic products can't compete with western products. In recent years, the global integrated circuit production has been transferred to China, which has obtained facilities and production technology close to the latest technology, and made the national defense electronics department as dynamic as the telecommunications department.

Taking advantage of the great attraction of the domestic information technology market to obtain the latest foreign technology, China's information technology companies, government R&D institutions, R&D fund projects and the military have formed an effective digital iron triangle, which combines the main government resources with the vitality of the commercial sector, making some departments, especially those centered on commercial finished products, successful. China regards this digital iron triangle model as a model for other defense industry reforms. Although the technical development of the national defense electronics sector is not thorough or comprehensive, it has achieved positive results in some important fields, such as semiconductors and other modern national defense electronics core products.

Digital iron triangle: a new model of national defense procurement

Strategies and policies.

The national science and technology development strategy, high-level coordination, and the financial support of government science and technology budget projects such as the five-year plan and the 863 plan have promoted the formation of the digital iron triangle. The strategy to support this iron triangle comes from the policy of Deng Xiaoping 16, and the national defense industry reform should implement "the combination of military and civilian, the combination of peacetime and wartime, the priority of military products, and the support of the people". This policy requires changing the national defense industrial system, so that the criterion for judging high-tech achievements lies not only in realizing national defense interests, but also in realizing commercialization and industrialization. Although some traditional national defense industries, such as ammunition industry, have implemented this strategy and realized the transformation from military products to civilian products (from tanks to trucks or civilian explosives), some new technology fields (such as routers) do not have a large-scale pre-existing industrial base, which makes the information technology department bypass a large number of institutional defects.

In addition, revising the development strategy of information technology and focusing on technological development rather than industrial production will also help to realize the digital iron triangle. 1986, the state requires military scientific and technological institutions to provide support for the government's economic construction, because it is easier to develop military science and technology on the basis of government science and technology, rather than developing government science and technology on the basis of military science and technology. During the period of 1989, on the basis of the research of dual-use technology, the government called for the civilian research of military technology and the commercialization of R&D institutions. To this end, the State Council has formulated a medium-and long-term scientific and technological development plan (1990-2000-20 10), suggesting that necessary measures should be taken to eliminate the existing institutional obstacles and promote the transformation process. Because of the interchangeability of technology, the information technology department is placed in a unique position, and the government's basic R&D department is commercialized for the benefit of civil economy and military procurement.

Three Vertices of the Digital Iron Triangle

The first apex: business information technology companies. The two most important information technology companies in China are telecom equipment and electronic equipment companies. The most important telecom equipment companies are Huawei, Datang, ZTE and Julong, all of which are independent private enterprises. Moreover, many electronic equipment companies are business-oriented integrated companies, such as China Electronics Company. Telecom equipment company originated from the existing communication research and development institutions of the government and the military. This contact provides a channel for personnel exchanges between the two sides, commercialization of government-organized R&D equipment and militarization of commercial R&D equipment.

Huawei Shenzhen Technology Company was established in 1988. Huawei has always maintained deep ties with China's military, and China's military plays multiple roles, both as an important customer of Huawei and as a research and development partner. At present, Huawei is the largest, fastest-growing and most important telecom equipment manufacturer in China, and one of the global 10 telecom equipment manufacturers, with 22,000 employees. Company sales increased from/kloc-0 to $350 million in 1996 to $3 billion in 2002. Its main products include switching system, intelligent network, wireless data communication, synchronous digital system transmission network, radio, data communication and broadband integrated digital service (B-ISDN), power supply and optical fiber system. According to the company, sales to military users only account for 65,438+0% of the annual sales. Although this number may be reduced, it at least means providing equipment and services worth $30 million to the military every year.

ZTE originated from China Aerospace Industry Corporation No.691Electronic Equipment Factory. In 2000, ZTE's revenue was 102 billion RMB. In 2000, the company employed more than 65,438+100,000 professionals, of whom more than 86% had university diplomas, 300 had doctoral and postdoctoral titles, and 2,000 had master's degrees. In 2000, ZTE occupied 30% of the domestic telecom market, of which the switch and storage server market accounted for 20%. Its switches, video conferencing systems, intelligent networks and other new products are sold to more than 30 countries in Southeast Asia, Latin America and North America, Eastern Europe and Africa. In the future, ZTE will focus on the research of mobile communication technology and develop GSM900 and CDMA equipment.

Datang Company was originally established in 1993, and its predecessor was China Institute of Communication Technology (CATT). Datang employs 4600 employees. Like Huawei, Datang has also invested heavily in its own research and development. It cooperated with Siemens to develop the third-generation mobile phone system that meets the standards of China and time division-synchronous code division multiple access. Datang started as a switch supplier, and now it turns to the development of data communication and traditional data equipment. The main product of Datang is SP30 switch, and its synchronous digital system and dense wavelength division multiplexing (DWDM) products have occupied a share in the domestic market. In the future, Datang will enter the ATM market and add information processing functions to its core switch products.

Julong Information Technology Co., Ltd. was established in March 1995, and was jointly funded by the National Engineering Technology Research Center and China Posts and Telecommunications Industry Corporation. In 2000, the company had 65,438+0,000 R&D personnel, 85% of whom had a postgraduate degree, with a registered capital of 550 million yuan and total assets of 3 billion yuan. Julong Company reinvests 10% of its profits in R&D every year. The most important product of the company is HJD-04 commercial telephone exchange developed by ourselves. In addition to HJD-04 switches, Julong also produces routers, connectors, transmitters, mobile, network and digital communication equipment, synchronous digital series and dense wavelength division multiplexing systems, radio local loop systems, high-speed Ethernet switches and telephone systems. In the future, Julong Company plans to develop ATM systems, information processing and broadband products, high-speed routers, integrated access servers, private branch exchange systems, wireless access products, intelligent network management systems and optical fiber switches.

Telecom equipment companies in China have not only become small manufacturers in the domestic market, but also become competitive companies in the region and even in the world. There are many reasons for their success, the most important of which is that the leaders of these companies have shown professionalism, recruited a large number of senior talents and provided them with generous salaries and excellent working environment. The company keeps the cost low, which makes the equipment price 30% lower than the world level. They provide excellent service for domestic operators. These companies have benefited a lot from local governments, banks, foreign companies, national defense industrial institutions, and local and military information technology research and development institutions.

The second peak: government R&D institutions. The research and development of dual-use technology in China is coordinated by the leading group for science and technology, which is led by members of the Politburo in charge of science and technology affairs. The group includes some important ministries and commissions: National Development and Reform Commission, Ministry of Science and Technology, China Academy of Sciences, PLA General Armament Department, National Defense Science, Technology and Industry Committee, etc. The research and development of military projects are coordinated by the General Armament Department and the Science and Technology Committee of the Commission of Science, Technology and Industry for National Defense. However, a great deal of scientific and technological research in China is of military significance. In addition to formulating long-term research and development plans for military and dual-use technologies, the Commission of Science, Technology and Industry for National Defense also formulates development strategies for civilian high technologies. Special field committees under the Ministry of Science and Technology are responsible for nuclear weapons, shipbuilding, aircraft development and electronic (including computer and information technology) equipment development, and there is also a special group responsible for C3 (command, control and communication) technology.

In the field of information technology, the government information leading group (SILSG) is generally led by members of the Politburo responsible for communications and electronic affairs. This organization is the most powerful information organization in China government. As an inter-agency coordination group, the government information leading group is responsible for formulating macro policies and mediating judicial disputes among government agencies. The policy of the government information leading group is implemented by the Ministry of Information Industry, which was established on the basis of the former Ministry of Electronic Industry, which was responsible for computer software and hardware, and the former Ministry of Posts and Telecommunications, with the number 1998. The Ministry of Information Industry is responsible for managing the information industry, standardizing the information market, formulating technical standards and formulating policies in the fields of communication, multimedia, broadcasting, satellite communication and the Internet.

Another coordinating body responsible for information technology and electronic equipment research, especially military research, is the Academy of Electronic Sciences (ESA). In the national defense electronic equipment industry, the Military Industry Foundation Bureau under the Academy of Electronic Sciences can coordinate information technology and electronic research with military enterprises. The Electronic Products Bureau of the Ministry of Information Industry is responsible for formulating various standards and promoting foreign trade. The pre-research fund of the Academy of Electronic Sciences is one of the eight national defense plans.

The former Ministry of Electronics Industry under the Ministry of Information Industry and the research institutes under the Ministry of Posts and Telecommunications have maintained long-term contact with the military and its information technology research institutions, and are affiliated to China Electronics Company (CEC) and its subordinate national import and export companies, China Electronics Import and Export Company and China Electronic Trade Group Company in business.

Among the research institutes of the Ministry of Information Industry, fifty-four is one of the most important ones engaged in military research. It mainly conducts research on communication and monitoring technology, including microwave relay communication, radio communication, decentralized communication, satellite communication, satellite broadcasting access, remote sensing, remote sensing survey, detection, communication electronic countermeasures, intelligence and reconnaissance. The Institute has developed the first all-digital satellite communication ground station, the first large-scale ship-borne satellite communication station, the first regional air defense communication network and the first satellite monitoring equipment in China.

Each defense industry company has one or more information technology research institutes or electronic research institutes, which cooperate with military or civilian companies in the fields of communication and microelectronics. The 303rd Institute of Aviation Industry Corporation is responsible for the development of semiconductor equipment. The 203, 206, 2 12 Research Institute of China North Industries Corporation is responsible for developing electronic equipment for new products such as computers and radar software. The 504th and 506th Space Research Institutes conduct research on communication and data management systems, and the 77th1Institute is responsible for microelectronics research. China Shipbuilding Industry Corporation 709 conducted computer and software research, 7 16 developed automation system, and 724 studied radar.

Among the research institutes of the Chinese Army, 56 have developed computer systems, and 6 1 Institute has developed command automation systems and C3I systems. The 62nd Research Institute conducts research and development of communication equipment, computers and command automation equipment. Research on microwave and encryption equipment in the former 63 Institute. A phased array antenna for satellite communication was developed by one of the above-mentioned research institutes to achieve the purpose of mobile communication and improve the rapid response capability of troops.

Government research fund project. The government's five-year plan and the R&D fund in the 863 plan have promoted the cooperation between the government R&D department and the business information technology department. For commercial companies, government research and development funds enable them to carry out high-cost research and development work, and as a form of subsidy, transfer funds to sales and production.

The first source of funds: the five-year plan. The government's most important support for enterprises is the government's science and technology research and development fund projects, and the key technology projects in the five-year plan are in the highest position in the science and technology fund system. In July, 2000, the State Council approved the research proposal of China Academy of Sciences 12 high-tech major project, including high-speed information network and supercomputer. R&D targets include developing integrated circuits between 0. 18 and 0.25 micron, the third generation mobile cellular telephone system, optical fiber communication and network access technology. More importantly, these technologies must be independently developed and have independent intellectual property rights.

The second source of funds: national defense fund projects. At present, there are at least eight national defense fund projects in China, including the National Defense 863 Plan, the National Defense Science and Technology Committee 973 Plan, the Military Model Project, the National Defense Science and Technology Pre-research Fund, the National Defense Key Laboratory Open Project Fund, the National Defense Science and Technology Pre-research Plan Project, the Equipment Technology Foundation Project, and the National Electronics Academy Pre-research Fund.

The third apex: military information technology. China's early information technology and communication facilities were controlled by the army. After the founding of New China, Wang Zhen and other senior military generals successively served as the Minister of Posts and Telecommunications. Up to now, China's army has maintained its participation in the telecommunications field through the Institute of Military Information Technology, the special ownership of communication infrastructure, bandwidth and frequency, and the relationship with commercial information technology companies.

The relationship between the military, information technology and electronic industry after Mao Zedong era has gone through two stages. The first category is basically the commercialization of communication networks and their services. China's army not only uses commercial technology to build military networks, but also generates income by building and operating these networks. Moreover, this kind of construction itself attracts foreign companies to seek joint ventures and are willing to transfer technology. China Electronic Systems Engineering Company of the General Staff Department and other military system synthesizers maintain working relations with civil and military research institutions in order to spread the technology of military R&D projects. After the military enterprise transformed from 65438 to 0998, the army entered the second stage. Although some commercial telecommunications construction is still carried out through affiliated companies, China's military has openly adopted the digital iron triangle model to provide funds and R&D support to companies facing the world in exchange for special user status.

The first stage: the expansion stage of telecommunication facilities. Before 1998, the most active sector of military commerce was telecommunications. Starting from 1988, the military began to provide commercial services to local customers by using its limited internal private communication network. At first, the army rented telephone lines to individuals and commercial companies and connected them to switches. Later, it gradually used the excess capacity in the ground wire and the cellular network of Advanced Mobile Analog Telephone System (AMPS) to gain commercial benefits.

At the same time, the military uses its own bandwidth spectrum. The bandwidth spectrum controlled by the Army is above 800MHz, which is also the best frequency band for mobile cellular communication. In order to profit from the military broadcasting bandwidth, China Telecom Company, the former Ministry of Posts and Telecommunications, and China Electronic Systems Engineering Company, the Communications Department of the General Staff Department, set up a joint venture company on 1995. China Electronic Systems Engineering Company is the key department of military communication in China. Its business includes mobile communication, secure telephone trunk line, computer network, encryption, microwave communication, computer application and special military C4ISR system. The company is responsible for designing, synthesizing and operating military communications and computer networks. It develops application software and keeps close contact with the research institute of C4ISR, microwave and encryption in the General Staff Department.

The second project separated from China's military bandwidth monopoly is the mobile radio paging service. For example, among the top ten pager companies in Guangzhou, three companies are controlled by the Air Force, the Guangdong Military Division and a subsidiary of the Commission of Science, Technology and Industry for National Defense. This company of the Air Force is called Guangzhou Bayi Communication Group, and in 1994, the number of commercial wireless paging service users reached 65,438+10,000.

The third major project that the PLA invested and gained commercial benefits was optical cable. China's army deployed a large number of manpower to lay most of the country's optical fiber trunk lines, and won economic rewards and the right to use some trunk lines. The army also laid special optical cables, some of which were used for commercial purposes.

The second stage: from manufacturers to digital iron triangle customers. China stopped directly participating in the construction of commercial communication networks in the late 1990s. 1On July 22nd, 998, at the enlarged meeting of the Central Military Commission, Comrade * * * demanded the dissolution of military commercial companies. Since then, the military has handed over the commercial company to the government.

The role, capital and technology of foreign companies

By injecting technology, capital and skills into commercial companies in the field of information technology in China, foreign companies have provided powerful help to the Digital Iron Triangle. It is not easy for foreign IT companies to enter the China market. Although China government-controlled institutions are willing to buy a large number of foreign equipment, the regulatory environment before China's entry into WTO has restricted the operation or provision of services by foreign companies, and China favors domestic enterprises in commercial competition. In this way, foreign companies have to establish technical cooperation with domestic companies in China and gain market access in China by investing in domestic R&D institutions and joint venture laboratories. For example, Huawei has reached technical cooperation agreements with Lucent, Motorola, Intel, IBM and other companies and established laboratories. Some multinational companies even agreed to transfer core technologies such as source code to gain market position. For example, Ericsson agreed to transfer the source code of CDMA cellular technology to its partner in China. In order to speed up the examination and approval of its anti-virus products by the laboratory of the Ministry of Public Security, Network Solutions handed over 300 kinds of computer viruses to the Ministry of Public Security.

In July 2003, China announced that more than 50 information technology companies, including at least three American companies, had formed an alliance to strengthen their position in China's defense market, because China's army reformed its procurement system through government procurement. General Li, former head of the General Armament Department, attended the establishment ceremony of the alliance. 12 companies donated information technology products such as servers, personal computers, switches and routers to the army. The representative of the company promised to help train information technology personnel for the army and raise the army's understanding of the industry. The alliance was established under the auspices of the Electronic Science and Technology Information Research Institute and Computer World Media Group under the Ministry of Information Industry of China, and was approved by the General Armament Department, the Ministry of Information Industry and China Electronics Technology Corporation.

Foreign technology transfer makes government departments and companies more independent of foreign capital and technology. This is what Chinese and foreign analysts call a new development model: cooperation, learning, mastery, independent development, substitution, independent innovation and global competition. In the sub-sectors of information technology and telecommunications, this self-sustaining road has replaced the old-fashioned and risky defense industry model.

Comprehensive influence of digital iron triangle

Impact on other defense industry sectors

Under the guidance of the government and the promotion of business vitality, the telecom and microelectronic equipment sub-sectors have found a successful model to improve the civil and military information technology infrastructure in China. However, it is still a question whether the successful model of information technology department can be applied to other less successful defense industry departments.

According to the survey, purchasing military information technology equipment from domestic companies has enabled the General Armament Department to learn a lot about signing contracts, competition and bidding, and the General Armament Department also encourages purchasers to apply these experiences to traditional defense industry procurement. In fact, the transfer of manufacturing technology and skills to commercial shipbuilding industry, combined with the reform of 1998 national defense industry, has a positive impact on the pace and quality of naval construction. However, considering the unique advantages of the information technology sector and the traditional defense industry sector, especially the backward aviation sector, it is not agile and dynamic enough, and the application of all these experiences in the traditional defense industry will be limited.

At present, most analysts believe that maintaining "social stability", the highest goal of the government, has affected the major reforms of the entire defense industry, because these reforms will undoubtedly lead to painful mergers, layoffs or bankruptcy of companies. Therefore, once defense industry analysts discuss similar institutional issues in all departments, they must face different progress when analyzing the reform progress of all departments.

Influence on military modernization

In the past, China's army suffered from the shortage and aging of information technology, which seriously affected the army's ability to transmit and process a large amount of information and the coordination ability of troops in various military regions, thus weakening the army's combat effectiveness. Communication problem was the main reason for China's heavy losses in 1979 Vietnam War. Through the Gulf War of 199 1, China's army fully realized the key role played by C4ISR based on information technology, and the importance of these technologies to ensure that the allied forces defeated an army armed with a large number of Soviet equipment.

In order to overcome the shortcomings, the Chinese Army began to implement a well-funded plan to update the C4ISR infrastructure. At the beginning, an important goal of modernization was to acquire advanced communication equipment from abroad and improve the capabilities of the troops by leaps and bounds. China buys communication equipment worth about 654.38+0.5 billion to 20 billion dollars from Lucent, Nokia, Ericsson and other companies every year. In the field of microelectronics, China has quickly become an important design and production base of the global semiconductor industry, providing a safe supply for China's army to acquire advanced integrated circuits of sensors and weapon systems. By introducing advanced secure communication infrastructure, China Army has made great progress in communication and operational safety, and its information transmission capacity has been improved. In the field of sensors, China has also made great progress. For example, China began to deploy new Beidou navigation satellite, Dongfanghong-4 communication satellite and phased array radar.

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