I remember well the time in the late 80s and early 90s when the topic of conversion was popular. Then it turned out that the state could not support the entire military-industrial complex, and defense enterprises had to try to produce consumer goods instead of the military one.

What is the conversion

In the post-Soviet era, they joked that that plant produced rockets - now pans, this one produced tanks - now baby carriages. And from the same metal.

These jokes are somewhere in the middle between truth and fiction. The fact is that military factories are mostly highly specialized. Their products are intended for other similar factories and no one needs them in civilian life.

An example of conversion is the Yuzhmash plant, which produced ballistic missiles, and now launch vehicles for launching satellites. At 80%, the plant switched to civilian products, but still barely survives.

Why conversion is needed

Let's take a factory that produces civilian products, the same pans. The enterprise buys metal from a supplier with its own money, makes pans, and sells them. As a result:

• the supplier makes a profit, pays tax on it to the state;
• the plant sells products, also pays tax;
• products are sold to stores, which again pay tax on sales;
• the plant pays wages to workers, from which a tax is also paid in favor of the state;
• both materials and finished products must be transported, which means that the carrier receives a profit, which is shared with the state.

The production of consumer goods is beneficial for the country. Profits in the form of taxes go into the budget without much effort, and there is no need to worry about feeding the workers. Wherever you throw it - some profits and savings. Everyone is in business, everyone receives income, and in the first place - the state.

Now let's take a military plant. Transportation of materials and finished products, salaries to employees, all expenses for the maintenance of the enterprise - they take money from the country's budget. The military industry is essentially parasites, a yoke around the neck of the state.

To paraphrase Robert Kiyosaki: "The civilian industry puts money in the pocket of the state, the military takes it out of the pocket."

Chinese President Xi Jinping will respond to the Pentagon's challenge. Reuters photo

Chinese President Xi Jinping has added another one to his numerous positions - the head of the Commission for Integrated Civil and Military Development. The name is tricky. But the bottom line is that the Chinese leadership intends to end the monopoly position of the military-industrial complex. State defense and advanced civilian enterprises should be combined into one bundle. Observers in Hong Kong say China wants to create firms like Boeing and Lokheed Martin in the US.

Beijing decided to shake up the outdated bureaucratic system for managing the production of weapons. But commentators in Hong Kong warn that the reform will run into opposition from groups that monopolize the defense industry and difficulties in transferring intellectual property rights.

The creation of the new commission has long been advocated by Xu Zengping, a member of the People's Political Consultative Council, a businessman and a former basketball star. “I think we should first allow state-owned enterprises and private companies to complement each other's advantages. And the process of demonopolizing the state defense industry will take a long time,” Xu told the South China Morning Post. Nevertheless, the ultimate goal is to create a more compact and efficient military production system, focusing on the experience of such US giants as Boeing and Lokheed Martin.

However, Richard Bizinger, a military expert at the School of International Studies in Singapore, doubts that China will be able to develop a military-industrial complex like America's. Chinese state-owned defense companies want to introduce market principles into their activities, but they are heavily dependent on government support. Bizinger cited the example of the Commercial Aviation Corporation of China, which is owned by the state. She did an unsatisfactory job with ARJ21 and C919 commercial aircraft. This company, according to the expert, will remain small and will build several civil aircraft, which, in turn, will be sold mainly to Chinese airlines.

There are many obstacles to the integration of the military and civilian industries. But one must keep in mind that the Chinese leadership attaches paramount importance to this problem. No wonder the commission was headed by none other than Xi Jinping, a leading researcher at the Institute told NG Far East RAS Vasily Kashin.

“The integration of military and civilian production has always been of great importance. When economic reforms began, there was a transfer of technology from the defense department to the civilian sphere. At that time, a number of companies in the field of auto construction and electronics grew out of military-industrial complex enterprises. While the conversion failed in Russia, it worked in China. For example, factories producing 2 million cars a year used to be military-industrial complex enterprises,” the expert said.

And now the reverse trend has begun - the transfer of technology from the civilian sector to the military. Moreover, the problem of integration of the two sectors in China has been raised to the highest high level. After all, Xi Jinping is both the chairman of the Central Military Council and the commander-in-chief of the armed forces.

This is where tradition comes in: China has set up quite a few other interdepartmental structures responsible for coordinating policy on important issues. According to Kashin, sometimes such leading groups have a small apparatus, and sometimes they grow and turn into real government agencies.

In this case, a permanent body has been created. Apparently, this is due to what the Pentagon did. Back in 2014, he began to implement a new defense strategy called the third offset strategy. The Pentagon opened a special representative office in Silicon Valley. Employees of the military department are focused on the integration of military and civilian developments. The emphasis is on artificial intelligence, robotics, 3D printing. The goal is to achieve overwhelming superiority over China. And now China is responding to this challenge in the spirit of its traditions, the expert believes.

The competition between the Chinese and American defense industry is going on, as it were, in the shadows. But according to the AsiaTimes online newspaper, the Trump administration is mulling a plan to punish the Chinese war machine for its expansion in the South China Sea and elsewhere. One of the elements of this "punishment" will be the curtailment of contacts between employees of the military departments of the two powers. Under Barack Obama, travel exchanges and reciprocal visits by warships have become a regular occurrence.

Transformations in the domestic military-industrial complex began in the late 80s. Over the course of all subsequent years, transformations in the field of military-industrial complex management were carried out in various organizational and legal forms: conversion of defense production; reforming the management system of industrial defense enterprises (privatization, corporatization); restructuring of the domestic military-industrial complex. A large number of military-industrial complex enterprises underwent intensive denationalization during the collapse of the USSR. The volume of state orders for the production of weapons and military equipment decreased in 1992 by almost 8 times. In 1997, about 50 percent of the ownership of Russian military-industrial complex enterprises was corporatized; out of 1700 enterprises of the military-industrial complex (not counting those that were on the balance sheet of the Ministry Russian Federation on nuclear energy) only 40 percent were wholly owned by the state, 31 percent of the enterprises were joint-stock companies with the participation of the state, 29 percent of the enterprises became completely private joint-stock companies. All work in the OPK was chaotic.

In the 90s, the military-industrial complex faced the problem of conversion. Conversion /lat./ "change, transformation". "Conversion of the military-industrial complex" is the transfer of military production to the production of civilian products.

The economy of the USSR has historically developed as a militarized economy, oriented towards a purely cost-based production structure, incapable of competition, oriented towards a closed domestic market. The directly military-industrial or defense complex gradually separated into an independent organizational structure, which included the management system, enterprises and organizations of nine ministries. The defense complex developed and produced far more than just military equipment. So, for example, in 1989 the share of non-food consumer goods and civilian products in the total production of the defense complex was 40%. This, in particular, was facilitated by the transfer in 1987 to the defense complex of enterprises of the reformed Ministry of Light and Food Industry. It is not uncommon for cases when the share of output of military products at enterprises of the defense complex did not exceed 10%, and a number of enterprises belonging to the defense ministries did not produce any military products at all. For a long time, the defense complex was provided as a priority financial resources, scientific and technical personnel, material resources. Given the position that the defense industry complex occupied in the country's economy, the weakness of civilian industries, when developing the conversion program, the concept of "physical" conversion was adopted, that is, the direct conversion of the production capacities of the defense industry. The production and scientific and technical potential of the defense industries, released as a result of the reduction in the production of weapons and military equipment, was to be used as a matter of priority for the implementation of state targeted programs that ensure the implementation of the most important areas of scientific and technological progress, including the development of civil aviation, shipbuilding, the space program of scientific and national economic importance, communications, electronic equipment and computer science, the production of promising materials and high-purity compounds, environmentally friendly energy, non-food consumer goods , technological equipment for the processing industries of the agro-industrial complex, light industry, trade and Catering, medical equipment, equipment and instruments for environmental purposes. The program provided for the creation of 22 basic intersectoral scientific, technical, technological, engineering and other centers for the conversion of the scientific and technical potential of the defense complex.

The adopted conversion program could be implemented only in the conditions of a planned distribution economy and was associated with the largest costs both for the development and industrial development of new products.

Initially, during the implementation of this program, the main tasks in the field of conversion at this stage were to be the preservation of the most important elements of the production and scientific and technical potential of enterprises of the defense complex of Russia, their maximum use for the reconstruction of the economy, the development of the social sphere, for the creation of import-substituting industries, and the expansion of export opportunities. countries.

It was planned to carry out the withdrawal of capacities related to the defense complex beyond the framework of the existing management system through the formation of economically independent corporations and concerns. Their involvement in the fulfillment of military orders should be carried out under contracts obtained mainly on a competitive basis.

When implementing this model, government authorities were entrusted with the tasks of creating macroeconomic conditions for the implementation of military orders, determining the conditions for contracting the development and implementation of mobilization policies, providing enterprises with various types of state assistance when their workload with defense orders changes, solving problems of public investment in enterprises related to the implementation of military orders, etc.

However, instead of a well-thought-out system for the implementation of this plan, draft conversion programs of 1990 were urgently used, focused on "physical" conversion, which could not be implemented within the framework of the new economic policy and unsuccessful attempts to offer domestic projects to Western investors.

The course of events in 1992-1995 showed that the government, for a number of reasons, could not and did not want to consistently maintain the conceived concept of conversion, and in fact the situation got out of control of the executive branch. Everything looked as if the simplest concept of demilitarization of the economy was being implemented - to get rid of inefficient industries at any cost, giving enterprises and organizations the right to look for a place in the new economic situation themselves.

Currently, the government is returning to the conversion of the military-industrial complex. By 2011, the volume of output of enterprises of the military-industrial complex of Russia should grow by 30%, and by 2015 - by 2.2 times. At the same time, in two years the share of civilian goods at defense enterprises will reach 53%, and in seven years - 59%.

According to the deputies, right now the defense industry has every opportunity to arrange the production of high-quality goods that are in demand on the market. According to the deputies, the military-industrial complex enterprises have already been prepared by the last wave for the production of civilian products and in modern conditions will be able to combine civilian and military production.

The opinions of parliamentarians on this issue were different: “Independent experts say that the idea of ​​conversion is hopeless. Even if the factories can withstand the increase in production, it will be useless: the domestic military-industrial complex in its current state is simply not capable of producing competitive goods.

According to experts, in modern conditions it is practically impossible to transfer military plants to peaceful rails. Conversion is now an extremely expensive and lengthy process.

“Military factories are highly specialized enterprises, so the possibility of conversion is very limited. But it seems that the government is not familiar with the latest studies on the effectiveness of conversion industries,” said Alexander Konovalov, president of the Institute for Strategic Assessments and Analysis.

“Obviously, the products of military factories are unlikely to be in demand on the market, if we do not take, for example, space rockets for commercial launches.

And in general, in modern conditions, in 99% of cases it is impossible to create a high-tech conversion production, this is a confirmed fact. It is much easier to build a specialized civilian plant next to a military enterprise and start production from scratch.

“Military-industrial complex enterprises have already survived the era of conversion, the restructuring of their production facilities for the production of civilian products,” Mikhail Grishankov, First Deputy Chairman of the State Duma Committee on Security, told NI. - Therefore, the government's plans cannot be called the announcement of a new conversion. This does not mean that we intend to release ladles instead of weapons. Along with weapons, modern civilian goods will be produced at defense plants. Moreover, there is no doubt that military developments and technologies may well be used for civilian purposes.

This is already happening: we have many programs within the framework of the United Aircraft Corporation, according to which military-industrial complex enterprises plan to produce, or are already producing, civil aircraft. In addition, the field of radio electronics and the production of communications has always produced products for both the army and the market. I am sure that the products of the Russian Corporation of Nanotechnologies will be both military and civilian.”

2.4 Military production conversion

The conversion of military production is the process of transferring enterprises of the defense industries to the production of civilian products. Under modern conditions, the conversion of military production is an essential component of the disarmament process. It allows you to avoid the economic and social costs associated with the closure of military enterprises, to use the creative potential

highly qualified personnel and advanced technological base of these enterprises to accelerate the scientific and technological progress. The reduction of military spending and the conversion of military production are becoming an important factor in economic development.

However, the necessity and expediency of conversion is not perceived unambiguously; economic and social barriers appear in the way of its implementation. So, for about 2 centuries the dispute about the role of military production in the development of the economy has been going on. For a long period of time, primarily in the countries of the developed zone, the opinion was created and maintained that the funds invested in the military-industrial complex stimulate the economy, being a stabilizer market demand, ensuring the workload of production capacities, creating jobs, stimulating scientific and technological progress. But in recent years, it has been increasingly confirmed that military spending slows down economic and technological development.

According to American scientists, such expenses are inflationary in nature, since the wages of employees of defense enterprises, leading to an increase in consumer demand, do not contribute to the expansion of the supply of goods and services, and, in addition, military production diverts raw materials and technical specialists from civilian industries. The existence of a monopoly of the military-industrial complex and a guaranteed sales market reduce labor productivity and increase production costs compared to civilian sectors of the economy.

As modern studies show, conversion does not contribute to the growth of unemployment either, since the creation of one job in military production requires more (4 times) capital investments than in civilian production. For example, every $10 billion creates 40,000 fewer jobs in military production than if this money were channeled into civilian industries. Data are given: $ 1 billion of Pentagon spending provides approximately 48 thousand jobs, and this amount spent in the healthcare sector will create 76 thousand, and in the education system - 100 thousand new jobs.

It is hard to deny that the development of military equipment has led to a number of technological innovations in aviation and other areas of society. Nevertheless, according to the UN, no more than 1/5 of research in military equipment is used for peaceful purposes. If we take into account that such developments, which give only 20% efficiency, employ 40% of all scientists and engineers, it becomes obvious that military programs slow down scientific and technical progress. Thus, it becomes obvious that the diversion of resources to peaceful purposes is in the vital interests of all countries.

Experts believe that the use of only 10% of world military spending for solving global problems, organizing joint international actions would put an end to mass starvation, illiteracy, and disease, would make it possible to overcome poverty and backwardness of hundreds of millions of people, and prevent an ecological catastrophe on the planet.

However, the implementation of the conversion raises the need to solve a number of problems, since the conversion is associated with the restructuring of the economy. The proposed transfer of enterprises to the production of civilian products will require, according to experts, government assistance similar to assistance to companies where a major modernization of production is taking place. Another equally important issue is the increase economic efficiency military industry. Privileges in the supply of raw materials and materials, inflated production costs, guaranteed sales of products, a high level of monopolization lead to high profits in these industries and to a decrease in competitiveness in the commercial market. Therefore, the reduction in the level of privileges of defense enterprises, which has begun in a number of industrialized countries, is an important condition for their survival in a market economy.

The process of diversification, an increase in the share of civilian production in the activities of defense enterprises, also contributes to the preparation of conditions for the conversion. This is achieved not only by acquiring new companies with experience in civilian industries, but also by directing R&D spending to non-military areas.

It should be borne in mind that in Russia it is planned to form technopolises and technology parks in areas with a high concentration of convertible military production, with the involvement of specialists and investments from other countries.

Of undoubted interest is the economic aspect of disarmament. In the course of it, a problem was revealed that neither the United States nor Russia are ready to solve yet. We are talking about expensive materials, which in the future can become inexhaustible sources of energy. But at present, there is no technology to turn highly enriched uranium into fuel for nuclear power plants, so storage of this material will be required. In addition, the program for the elimination of poisonous substances, the destruction of thousands of tanks, guns, armored vehicles, involves large expenditures. All this causes ambiguous estimates of conversion in all states with military production. For example, in the USA, among the negative aspects of conversion, the need to transfer about 600,000 qualified specialists to production with a lower level of technology is put forward in the first place. Experts believe that many defense industry enterprises are not suitable for the mass production of simple and cheap products, so the technological characteristics of civilian products must correspond to the characteristics of converted production.

Conclusion

End of the 20th century led to a broad rethinking of the ways of social development. Concept economic growth, which approaches the analysis of material production from a purely economic point of view, was applicable as long as natural resources seemed inexhaustible due to the limited impact of human production activities. Society is now realizing that economic activity is only a part of human activity and economic development must be considered within the framework of a broader concept of social development. Indeed, the problems of the natural environment and its reproduction, religious, moral, philosophical values, problems of security and peace, etc., are becoming increasingly important.

In today's world, consumption is steadily expanding natural resources. Waste production and consumption are also growing. The costs of combating environmental pollution are increasing. As a result, society must constantly increase the share of national income that compensates for the costs of extracting natural resources and protecting the human environment. This limits the rate of economic growth and worsens the quality of life of the population.

Why and how China's military-industrial complex was able to become the basis for the country's economic take-off

During perestroika, the word "conversion" was very popular in Russia. In the minds of the yet undisillusioned citizens of the still undisintegrated Soviet Union, this concept implied that surplus military production would quickly switch to civilian production, flood the market with hitherto scarce goods, and provide the long-awaited consumer abundance.

The conversion of the USSR failed along with perestroika. The huge industrial capacities of the highly developed Soviet military-industrial complex never became the flagships of capitalist industries. Instead of a sea of ​​conversion goods, the apparent consumer abundance was provided by imports, primarily goods made in China. But until now, few people know that mass Chinese consumer goods are to a large extent also a product of conversion, only Chinese. The conversion in the PRC began a little earlier than in Gorbachev's USSR, continued longer and was completed much more successfully.

Agricultural divisions of nuclear war

By the time of Mao Zedong's death in 1976, China was a huge and poor militarized country with the largest army in the world. Four million Chinese "bayonets" were armed with almost 15 thousand tanks and armored vehicles, over 45 thousand artillery pieces and rocket launchers, over five thousand combat aircraft.

In addition to the armed forces, there were another five million so-called cadre militia - two thousand territorial regiments armed with rifle, light artillery and mortars.

Military parade on Tiananmen Square in Beijing, China, 1976. Photo: AP

All this sea of ​​\u200b\u200bweapons was exclusively local, Chinese-made. In 1980, almost 2,000 military industry enterprises operated in China, where millions of workers produced all types of conventional weapons, as well as nuclear missiles. China at that time had the most developed military-industrial complex among all the countries of the "third world", yielding in terms of military production and military technology only to the USSR and NATO countries.

China was a nuclear power with a fairly developed rocket and space program. In 1964, the first Chinese atomic bomb exploded, and in 1967, the first successful launch of a Chinese ballistic missile took place. In April 1970, the first satellite was launched in China - the republic became the world's fifth space power. In 1981, China was the fifth in the world - after the USA, USSR, Great Britain and France - to launch its first nuclear submarine.

At the same time, until the early 1980s, China remained the only country on the planet that was actively and actively preparing for a world nuclear war. Chairman Mao was convinced that such a war with the massive use of atomic weapons was inevitable and would happen very soon. And if in the USSR and the USA, even at the height of the Cold War, only the armed forces and enterprises of the military-industrial complex were preparing directly for a nuclear apocalypse, then in Maoist China, almost everyone without exception was engaged in such preparation. Bomb shelters and underground tunnels were dug everywhere, almost a quarter of enterprises were evacuated in advance to the so-called "third line of defense" in remote, mountainous regions of the country. Two-thirds state budget China in those years was spent on preparing for war.

According to Western experts, in the 1970s, up to 65% of the funds intended in the PRC for the development of science went to research related to military developments. Interestingly, it was planned to launch the first Chinese into space back in 1972. But China did not have enough money to simultaneously prepare for manned space exploration and immediate nuclear war - China's economy and finances were still weak at that time.

With such militarization, the army and the military-industrial complex of China were inevitably involved in all spheres of the life and economy of the country. It was a kind of reverse conversion, when army units and military enterprises, in addition to direct tasks, were also engaged in self-sufficiency in food and civilian products. In the ranks of the People's Liberation Army of China (PLA) there were several so-called production and construction corps and agricultural divisions. The soldiers of the agricultural divisions, in addition to military training, were engaged in the construction of canals, planting rice and raising pigs on an industrial scale.

Soldiers of "special export regions"

The situation began to change radically in the early 1980s, when Deng Xiaoping, who had become firmly established in power, began his transformations. And although his economic reforms are widely known, but few people know that the first step towards them was the refusal to prepare for an immediate nuclear war. The highly experienced Deng sensibly reasoned that neither the US nor the USSR really wanted a “hot” world conflict, let alone a nuclear one, and the presence of its own nuclear bomb gave China sufficient security guarantees to abandon total militarization.

According to Xiaoping, for the first time in modern times, China has been able to focus on internal development, modernizing the economy and only as it develops, gradually strengthening national defense. Speaking to the leaders of the CPC, he gave his conversion formula: "A combination of military and civilian, civilian and non-peaceful, the development of military production based on the production of civilian products."

Almost everyone knows about free economic zones, which began the triumphal procession of Chinese capitalism. But almost no one is aware that the first 160 objects of China's first free economic zone - Shenzhen - were built by people in uniform, 20 thousand soldiers and officers of the People's Liberation Army of China. In the headquarters documents of the PLA, such zones were called in a military way - "special export region".

International Trade Center in Shenzhen Free Economic Zone, China, 1994. Photo: Nikolai Malyshev / TASS

In 1978, the civilian production of the Chinese military-industrial complex amounted to no more than 10% of production; over the next five years, this share doubled. It is significant that Xiaoping, unlike Gorbachev, did not set the task of carrying out the conversion quickly - for the entire 80s it was planned to increase the share of civilian products of the Chinese military-industrial complex to 30%, and by the end of the 20th century - to 50%.

In 1982, a special Commission on Science, Technology and Industry for Defense was created to reform and manage the military-industrial complex. It was she who was entrusted with the task of converting military production.

Almost immediately, the structure of the Chinese military-industrial complex underwent radical changes. Previously, the entire military industry of China according to patterns Stalinist USSR was divided into seven strictly secret "numbered ministries". Now the "numbered" ministries have officially ceased to hide and received civilian names. The second Ministry of Machine Building became the Ministry of Nuclear Industry, the Third - the Ministry of Aviation Industry, the Fourth - the Ministry of Electronics Industry, the Fifth - the Ministry of Arms and Ammunition, the Sixth - the China State Shipbuilding Corporation, the Seventh - the Ministry of Space Industry (both ballistic missiles and "peaceful" space systems).

All these declassified ministries established their commercial and industrial corporations, through which from now on they were to develop their civilian production and trade in civilian products. So the "Seventh Ministry", which became the Ministry of Space Industry, established the Great Wall Corporation. Now it is widely known in the world China Great Wall Industry corporation, one of the largest companies in the field of production and operation of commercial satellites of the Earth.

In 1986, a special State Machinery Industry Commission was established in China, which combined the management of the civilian Ministry of Machinery, which produced all industrial equipment in the country, and the Ministry of Arms and Ammunition, which produced all artillery pieces and shells. This was done to improve the efficiency of national engineering management. From now on, the entire military industry, which provided numerous Chinese artillery, was subordinated to civilian tasks and civilian production.

Further changes in the structure of the Chinese military-industrial complex occurred in 1987, when many of the "third line of defense" enterprises created for nuclear war in mainland China were closed or moved closer to transport hubs and large cities, or donated to local authorities for the organization of civilian production. In total, over 180 large enterprises that were previously part of the system of military ministries were transferred to local authorities that year. In the same 1987, several tens of thousands of employees of the Ministry of Atomic Industry of China, previously employed in uranium mining, were reoriented to gold mining.

However, the first years of Chinese conversion developed slowly and without high-profile achievements. In 1986, Chinese military-industrial complex enterprises exported a little more than 100 types of civilian products abroad, earning only $36 million that year - a very modest amount even for China's still underdeveloped economy.

Chinese conversion exports were then dominated by the simplest goods. In 1986, factories subordinate to the Main Directorate of Logistics of the PLA exported leather jackets and winter down jackets to the USA, France, the Netherlands, Austria and 20 other countries. The proceeds from such exports, by order of the PLA General Staff, were directed to the preparation of the conversion of factories that were previously engaged exclusively in the manufacture of military uniforms for the Chinese army. In order to facilitate the transition to civilian production for these factories, by decision of the PRC government, they were also tasked with providing uniforms for all railway workers, stewardesses, customs and prosecutors of China - all non-military people who also wear uniforms by the nature of their service and activities.

"Bonuses" from the West and East

The first decade of China's economic reforms passed in a very favorable foreign policy and foreign economic environment. From the late 1970s to the events on Tiananmen Square, there was a kind of "honeymoon" between communist China and Western countries. The United States and allies sought to use the PRC, which was openly in conflict with the USSR, as a counterbalance to Soviet military power.

Therefore, the Chinese military-industrial complex, which had begun the conversion, at that time had the opportunity to cooperate quite closely with the military-industrial corporations of the NATO countries and Japan. Back in the mid-1970s, China began purchasing computer equipment, communications equipment, and radar installations from the United States. Profitable contracts were signed with Lockheed (USA) and the British Rolls-Royce (in particular, licenses for the production of aircraft engines were purchased). In 1977, the PRC purchased samples of helicopters and other equipment from the famous German company Messerschmitt. In the same year, in France, China acquired samples of modern rocket technology, and also began to cooperate with the FRG in the field of nuclear and missile research.

In April 1978, the PRC received the most favored nation treatment in the EEC (European Economic Community, the predecessor of the European Union). Prior to this, only Japan had such a regime. It was he who allowed Xiaoping to begin the successful development of "special economic zones" (or "special export regions" in the PLA headquarters documents). Thanks to this most favored nation treatment, Chinese army uniform factories were able to export their simple leather jackets and down jackets to the United States and Western Europe.

Without this "most favored nation" in trade with the richest countries in the world, neither China's special economic zones nor the conversion of the PRC's military-industrial complex would have been such a success. Thanks to the cunning policy of Xiaoping, who successfully used the Cold War and the desire of the West to strengthen China against the USSR, Chinese capitalism and conversion at the first stage developed in "hothouse conditions": with wide open access to money, investments and technologies of the most developed countries of the world.

China's flirtation with the West ended in 1989 after the events in Tiananmen Square, after which the "most favored nation" was canceled. But the bloody dispersal of Chinese demonstrators was only a pretext - China's close contact with NATO countries interrupted the end of the Cold War. With the beginning of the actual surrender of Gorbachev, China was no longer of interest to the United States as a counterbalance to the Soviet Union. On the contrary, the largest country in Asia, which began to develop rapidly, became a potential competitor to the United States in the Pacific region.

Workers in a textile factory, Jinjia, China, 2009. Photo: EPA / TASS

China, in turn, has successfully used the past decade - the flywheel of economic growth has been launched, economic ties and the flow of investment have already gained a "critical mass". Cooling political relations with the West by the early 1990s deprived China of access to new technologies of NATO countries, but could no longer stop the growth of the Chinese export industry - world economy could no longer do without hundreds of millions of cheap Chinese workers.

At the same time, against the backdrop of a cold snap with the West, luck smiled on China from the other side: the USSR collapsed, whose might was feared in Beijing for many years. The collapse of the once formidable "northern neighbor" not only allowed the PRC to calmly reduce the size of the land army and military spending, but also gave additional, very important bonuses to the economy.

The republics of the former Soviet Union, firstly, became a profitable, almost bottomless market for the still not very high-quality goods of young Chinese capitalism. Secondly, the new post-Soviet states (primarily Russia, Ukraine and Kazakhstan) have become for China an inexpensive and convenient source of both industrial and, above all, military technologies. Military technology former USSR by the beginning of the 1990s, they were at a completely global level, and the technologies of the civilian industry, although inferior to the leading countries of the West, were still superior to those in the PRC of those years.

The first stage of China's economic reforms and military conversion took place in a very favorable external environment, when the state, officially calling itself the Middle, successfully used both East and West for its own purposes.

Brokers in uniform

Due to the favorable situation, the Chinese conversion proceeded simultaneously with the reduction of the large army. Over the decade, from 1984 to 1994, the size of the PLA decreased from about 4 million people to 2.8 million, including 600,000 career officers. Obsolete samples were removed from service: 10 thousand artillery pieces, over a thousand tanks, 2.5 thousand aircraft, 610 ships. The reductions almost did not affect the special types and types of troops: the airborne units, special forces (“quantou”), rapid reaction forces (“kuaisu”) and rocket troops retained their potential.

Large-scale economic activity of the PLA was allowed and developed from the early 1980s as a support national economy. In addition to the conversion of defense enterprises, which gradually switched to the production of civilian products, a specific conversion took place directly in the military units of the People's Liberation Army of China.

In the military districts, corps and divisions of the PLA, their own "economic structures" arose like mushrooms, aimed not only at self-sufficiency, but also at capitalist profit. These army "economic structures" included agricultural production, the production of electronics and household appliances, transport services, repair services, the leisure sector (the development of audio-visual equipment and even the organization of commercial discos by the army), banking. An important place was also occupied by the import of weapons and dual-use technologies, the trade in surplus and new weapons with third world countries - the flow of cheap Chinese weapons went to Pakistan, Iran, North Korea, and the Arab states.

According to estimates by Chinese and foreign analysts, the annual volume of China's "military business" in its peak period in terms of scale and results (the second half of the 1990s) reached $10 billion annually, and the net annual profit exceeded $3 billion. At least half of this commercial profit was spent for the needs of military construction, for the purchase of modern weapons and technologies. According to the same estimates, the commercial activities of the PLA in the 90s annually provided up to 2% of China's GDP. This is not about the conversion of the military industry, but about the commercial activities of the PRC army itself.

By the mid-1990s, the Chinese army was running nearly 20,000 commercial enterprises. According to Western experts, up to half of the personnel of the ground forces, that is, more than a million people, were in fact not soldiers and officers, but were engaged in commercial activities, provided transportation or worked at machine tools in military units, which in essence were ordinary civilian factories. products. In those years, such army factories produced 50% of all cameras, 65% of bicycles and 75% of minibuses produced in China.

The conversion of the military industry proper by the mid-1990s also reached impressive volumes, for example, almost 70% of the products of the Ministry of Armaments and 80% of the products of naval shipbuilding enterprises were already civilian. During this period, the PRC government ordered the declassification of 2237 advanced scientific and technical developments of the defense complex for their use in the civilian sector. By 1996, the enterprises of the Chinese military-industrial complex were actively producing more than 15 thousand types of civilian products, mainly for export.

As the official newspapers of China wrote in those years, when choosing directions for the production of civilian goods, military-industrial complex enterprises act according to the principles of “search for rice to feed themselves” and “hungry in food is illegible.” The conversion process was not complete without spontaneity and thoughtlessness, which led to the mass production of low quality products. It is natural that Chinese goods at that time were a symbol of cheap, mass and low-quality production.

According to the Institute of Industrial Economics of the Chinese Academy of Social Sciences, by 1996 the country managed to transform the military-industrial complex from a manufacturer of military equipment only into a manufacturer of both military and civilian products. Despite all the vicissitudes of reforms and a rather "wild" market by the end of the 1990s, the Chinese military-industrial complex consisted of more than two thousand enterprises, which employed about three million people, and 200 research institutes, employing 300 thousand researchers.

By the end of the 20th century, China had accumulated sufficient industrial and financial potential in the course of market reforms. The active economic activity of the PRC army already clearly interfered with the growth of its combat capability, and the funds accumulated by the country already made it possible to abandon the commercial activities of the armed forces.

Therefore, in July 1998, the CPC Central Committee decided to stop all forms of commercial activities of the PLA. In two decades of reform, the Chinese army has built a vast entrepreneurial empire, ranging from the transportation of commercial goods by military ships and aircraft to show business and trade. securities. It was no secret to anyone that the military was involved in smuggling operations, including the import of oil not controlled by government agencies, the trade in duty-free cars and cigarettes. The number of army trading and manufacturing enterprises in the PRC reached several tens of thousands.

The reason for the ban on military commerce was the scandal associated with the J&A, the largest brokerage company in the south of the country, created by the PLA. Its leadership was arrested on suspicion of financial fraud and transferred to Beijing. Following this, a decision was made to terminate free military enterprise.

"Great Wall of China" military corporations

Therefore, since 1998, a large-scale reorganization of both the PLA and the entire military-industrial complex began in the PRC. To begin with, more than 100 legislative acts on the military industry were declassified and revised, and a new system of military legislation was created. Was accepted new law The People's Republic of China "On National Defense", the Committee of Defense Science, Technology and Industry was reorganized, a new structure of the Chinese military-industrial complex was established.

11 market-oriented large associations of the Chinese military industry have emerged:

Nuclear Industry Corporation;

Corporation for the construction of nuclear industry facilities;

First Aviation Industry Corporation;

Second Aviation Industries Corporation;

Northern Industrial Corporation;

Southern Industrial Corporation;

Shipbuilding Industry Corporation;

Heavy Shipbuilding Corporation;

Aerospace Science and Technology Corporation;

Aerospace Science and Industry Corporation;

Electronic Science and Technology Corporation.

During the first five years of their existence, these corporations made a great contribution to the modernization of defense and the development National economy China. If in 1998 defense industry was one of the most unprofitable industries, in 2002, Chinese military-industrial corporations became profitable for the first time. Since 2004, shares of 39 military-industrial complex enterprises have already been listed on Chinese stock exchanges.

The military-industrial complex of China began to confidently conquer civilian markets. Thus, in 2002, the military-industrial complex, in particular, accounted for 23% of the total volume of cars produced in the PRC - 753,000 vehicles. China's defense industry also mass-produced civilian satellites, aircraft, ships, and reactors for nuclear power plants. The share of civilian goods in the gross output of China's defense enterprises at the beginning of the 21st century reached 80%.

What a typical military-industrial corporation of the PRC is like can be seen in the example of the North Industrial Corporation (China North Industries Corporation, NORINCO). It is the country's largest association for the production of weapons and military equipment and is under the direct control of the State Council of the People's Republic of China, has more than 450 thousand employees, includes more than 120 research institutes, manufacturing enterprises and trading companies. The corporation develops and manufactures a wide range of high-tech weapons and military equipment (for example, missile and anti-missile systems), and at the same time produces a variety of civilian products.

Philippine Army Major General Clemente Mariano (right) and a representative of the China Northern Industrial Corporation (Norinco) at a stand with mortars made in China at the International Aviation, Navy and Defense Exhibition, in Manila, Philippines, February 12, 1997. Photo: Fernando Sepe Jr. /AP

If in the military sphere the Northern Corporation produces weapons from the simplest Type 54 pistol (a clone of the pre-war Soviet TT) to multiple rocket launchers and anti-missile systems, then in the civilian sphere it produces goods from heavy trucks to optical electronics.

For example, under the control of the Northern Corporation, several of the most famous brands of trucks in Asia are produced and one of the most significant and largest factories, Beifang Benchi Heavy-Duty Truck, operates. In the late 80s, this was a key project for the PRC, the main goal of which was to solve the problem of the shortage of heavy trucks in the country. Thanks to the “most favored nation” regime that existed in those years in trade with the EEC, Beifang Benchi cars (translated into Russian as “Northern Benz”), these cars are produced using Mercedes Benz technology. And now the company's products are actively exported to the Arab countries, Pakistan, Iran, Nigeria, Bolivia, Turkmenistan, Kazakhstan.

At the same time, the same "Northern Corporation", not without reason, is suspected by the United States of military cooperation with Iran in the field of developing missile weapons. In the process of investigating these relations between the Chinese corporation and Tehran's ayatollahs, the US authorities found eight subsidiaries of Norinco engaged in high-tech activities on its territory.

Without exception, all military-industrial corporations of the PRC work in the civilian sphere. Thus, the nuclear industry of the PRC, which previously produced mainly military products, follows the policy of "using the atom in all spheres of management." Among the main activities of the industry are the construction of nuclear power plants, the extensive development of isotope technology. To date, the industry has completed the formation of a research and production complex, which makes it possible to design and build nuclear power units with a capacity of 300 thousand kilowatts and 600 thousand kilowatts, and in cooperation with foreign countries(Canada, Russia, France, Japan) - nuclear power units with a capacity of 1 million kilowatts.

In China's space industry, an extensive system of scientific research, development, testing and production of space technology has been formed, which allows launching various types of satellites, as well as manned spacecraft. To ensure them, a telemetry and control system has been deployed, including ground stations on the territory of the country and sea vessels operating throughout the oceans. The Chinese space industry, not forgetting its military purpose, produces high-tech products for the civilian sector, in particular CNC machine tools and robotics.

A Chinese unmanned aerial vehicle designed for military and civilian use in China at Aviation Expo, 2013. Adrian Bradshaw / EPA / TASS

Borrowing and industrial development Foreign experience in the aircraft industry has allowed the PRC to take a strong position in the foreign market as a supplier of spare parts and aircraft components to most developed countries. For example, the First Aviation Industry Corporation (the number of employees is over 400,000) signed an agreement with Airbus in 2004 to participate in the production of spare parts for the world's largest serial airliner, the Airbus A380. In Russia, since 2010, the representative office of this corporation has been actively promoting its heavy mining excavators on our market.

Thus, China's defense industry has become the base for civil aviation, automotive and other civilian industries in China. At the same time, the conversion military-industrial complex of China not only contributed to the rapid development of the Chinese economy, but also significantly raised its technical level. If 30 years ago China had the most developed military-industrial complex among the Third World countries, lagging far behind NATO and the USSR in advanced developments, then at the beginning of the 21st century, thanks to a well-thought-out conversion and skillful use of favorable external circumstances, China's defense industry is confidently catching up with the leaders, entering the top five the best military-industrial complexes of our planet.

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