China's Military Enterprises go public, foreign investment cautiously welcomed

Mr. Zhang Qinwei, Director of COSTIND

November 15, China's COSTIND (commission of Science Technology and Industry for National Defense) issued "Provisional Measures for Military Enterprises Shareholding Reform’s Implementation". This behavior showed that China has permit domestic listed corporation to buy and reform Military enterprises.

The "Provisional Measures" have cleared that Chinese military firms can be reformed and opened to public under 4 types: state-owned, state absolutely holding, state relatively holding, and state sharing.

After COSTIND's authorization, present domestic state-controlling-holding listed companies can deal with state-run military enterprises by unitary or partial acquisition and re-organization.

To future domestic listed firms carrying on military products, the new "Provisional Measures" especially regulate special articles, including:

No changes of Controlling Shareholders can become effective without reporting to COSTIND and carrying procedures for approval;
The alternation of board chairman and general manager must be recorded on COSTIND;
The recruitment of oversea independent directors must be recorded on COSTIND;
The significant acquisition behavior initiated by buyer, who will hold over 5% percent sharing of listed company, must declare to COSTIND.

Besides, foreign capital also gets clear ways of entering Chinese military industrial area. The "Provisional Measures" regulate that state-owned and state absolutely holding are forbidden to be sold to foreign capital; state relatively holding military firms are limited to foreign investment and re-organized state sharing military companies are totally opened for foreign investors.

Recently, series of regulations have been issued by COSTIND for delivering more instructions on more reformative involvements from non-state-own firms and foreign investment.

Displacement of Type 054A Frigate Possibly underestimated

Now there are totally 4 Type 054A "Jiangkai II" Frigates having being manufactured in China Shanghai Hudong and Guangzhou Huangpu Shipyards. And 2 vessels have been in sea trial to be delivered to PLA Navy.

Outside usually estimates that Type 054 and 054A are in 3500-ton-level. But unconfirmed resource in PLA Navy indicated that displacement of Type 054/054A is underestimated: Type 054 to be 4300 tons in full-load displacement and Type 054A to 4500 tons.

According to PLA Navy’s previous standards, the displacement of frigate is usually below 2000 tons. PLA Navy's Type 053H2 and Type 053H3 both under 2500 tons. Even Type 052 "Luhu" Destroyer, China's most advanced warship in early 1990s, also did not exceed 5000 tons in full load displacement.

But advanced large displacement frigates developed in Western Europe drew the attentions of PLA Navy. Under the background of "Economic Centralization", PLA surely has great interests on multifunctional but cheaper frigates, which are capable to replace aging destroyers.

Obviously, Type 054 was developed for convoy duties and operating in low intensity marine conflict with "Point Defense Ability". A great larger Type 054 Frigate compare to Type 053 family can have longer endurance ability and operate under cover from land-based PLA Navy Aviation wings.

But the boom of China economy and Embassy bombed by US lead Chinese government to eye on more powerful national defense, especially greater sea power for protecting energy lifeline. The distinguished upgrade from Type 054’s "Point Defense Ability" to 054A’s "Area Defense Ability" just reflects PLA navy's demand in "Blue water" combat, in which the Aircraft Carrier Group is the main role.

The power system maybe is a critical argument to overthrow the rumor of heavier Type 054A. Due to poor engine manufacturing, Type 054’s CODAG propulsion system in all probability can not drive this 4500-ton hull in 20 Kts to cruise with aircraft carriers. However the situation in China is different.

The Varyag being reconstructed in Dalian Shipyard is eyed as a training platform and limitedly deployed in “yellow water”. For the great damages of Varyag power system when it sold in 1998, PLA can not fully recover it and operate as its designed maximum speed. So 4500-ton Type 054A propelled by CODAG is still acceptable in PLA’s first experimental carrier battle group, which has one Varyag carrier and 4-6 054A frigates.

On the contrary, 1-2 conventional or nuclear carriers built by China shipbuilders will become the real center of PLA Navy’s deep-sea battles groups. And 4-6 PLA DDGs (like Type 052B, Type 051C or Type 052C) equipped with more powerful propulsion system will be the main protective surface combatants for carrier group.

China denies type 05 SPH copied from Russia

Chinese Type05 SPH

PLA Army's Type 05 Self-Propelled Howitzer, which is opened in PLA 80th anniversary exhibition in 2007, is usually considered as a copy of Russia's MSTA-S 2S19 152mm SPH. But weeks before China resource insisted that Type 05 SPH did not steal ideas from Russia 2S19 SPH.

Yi Qunzhi, One of Type 05 Developing Team from PLA General Armament Department, told that the project of Type 05 SPH was initiate in 1991 and was to absorb western countries' 155mm Howitzer technologies for replacing exist 152mm, 133mm and 122mm Howitzer.

Russia's MSTA-S 2S19 152mm SPH

As worldwide armies usually hesitated on 155mm 52 caliber SPH and PZH 2000 eventually won its first contract until 1996, so the development of Type 05 SPH had been under great pressure from PLA army, Yi said.

From Yi’s conclusion, however, at present PLA has been pleased with the performance of Type 05 and believes it reaching leading position on world. In PLA's testing, Type 05 SPH 52-calibre gun (8.06m length) shot a standard 155mm round near a distance of 40 KM.

China announces that Type 05 uses full digital fire-control and can automatically transfer battlefield information with other reconnaissance & commanding vehicles via data-link.

The autonomous fire control functions are controlled by on-board computer. In the automatic mode, the gun is automatically engaged targets and relayed by fire control data provided by the ballistics computer

Chinese expert explained the huge size of Type 05 turret is due to the more digital fire control devices inside for fast response and accurate striking. Another reason is the turret has automatic ammunition loading mechanism to ensure the demand of high rate of fire.

During the early argumentation, Type 05 once chose between combustible cartridge and modular propellant charge. But PLA finally abandoned the modular ammo charge because of technological difficulties.

Type 05 SPH certainly will become the main artillery batteries in PLA army-division level ground forces. Now China has great interests on XM982 Excalibur 155mm Precision Guided Extended Range Artillery Projectile and eyes it as the future of ground firepower. As for Russia’s Koalitsiya-SV (Coalition) 152mm SPH, Chinese developer does not believe its values and PLA has no plan to develop similar equipment.

Yi said that PLA’s next generation SPH or ground long-range firepower neutralization system will be in shortened development period and finished product will probably be out in 2012.

China accuses Hacking operation from Taiwan and U.S.

Addresser of Taiwan Affairs Office of Chinese State Council

In October, Chinese Ministry of State Security (MSS) used a state-run paper media to unveil that China has been being attacked from more and more foreign organized hackers and Chinese national security is being threatened by cyber area.

"Global Times", quoting officials from Ministry of State Security, said that tens thousands of oversea remote administration computers are monitoring Chinese victim computers through spy software and foreign intelligence agencies has set up special organizations to penetrate firewall and steal Chinese key areas' information through zombie computers' distributed trespass.

Taiwanese Li Fangrong

The Ministry of State Security has opened detail information about a fatal Cyber-Spy case, which is headed by 30-year Taiwanese Li Fangrong. MSS declared that he once lived in Moscow and organized cyber attacks on Chinese mainland's thousands of national defense research institutes, military industrial labs and several Chinese oversea embassies. Via "Trojan horse" software, Li Fangrong control hundreds of Chinese computers and harvest great valuable information about China's Politics, Military and Foreign Affairs.

Chinese security department has detected Li's activities, but Li successfully returned to Taiwan Military Intelligence Agency. Chinese administration has to List Li in "Most Wanted" and to capture him when he in Chinese mainland.

Accroding to China's number, the computers infected by spyware are mainly located in Shanghai, Beijing and Jiangsu Province. Meanwhile, China has detected tens thousands of foreign spyware distributed IP addresses, 42% from Taiwan and 25% from United Sates.

Chinese Research Institutes and Labs are usually warned of restrict using on computer devices. However, the rules are usually ignored. In 2006, when China's CASIC(China Aerospace Science & Industry Corp)'s Intranet Network surveyed by Cyber Security Department, spywares are all founded in computers which belong to classified department and Corporation Heads.

In August, during Mrs Merkel's trip in China, Der Spiegel reported that China has hacked into the computers of Angela Merkel’s Chancellery and three other German ministries and Germany federal office has prevented 160 giga-byte information being transferred to China.
"Global Times" is sponsored by "People Daily" and has great influence in Chinese society.