MILITARY-CIVIL FUSION (MCF) DEVELOPMENT STRATEGY

Key Takeaways

• The PRC pursues its MCF (军民融合) Development Strategy to “fuse” its security and development strategies into its Integrated National Strategic System and Capabilities in support of China’s national rejuvenation goals.

• The PRC’s MCF strategy includes objectives to develop and acquire advanced dual-use technology for military purposes and deepen reform of the national defense science and technology industries and serves a broader purpose to strengthen all the PRC’s instruments of national power.

• The PRC’s MCF development strategy encompasses six interrelated efforts: (1) fusing China’s defense industrial base to its civilian technology and industrial base, (2) integrating and leveraging science and technology innovations across military and civilian sectors, (3) cultivating talent and blending military and civilian expertise and knowledge, (4) building military requirements into civilian infrastructure and leveraging civilian construction for military purposes, (5) leveraging civilian service and logistics capabilities for military purposes, and (6) expanding and deepening China’s national defense mobilization system to include all relevant aspects of its society and economy for use in competition and war.

• Since early 2022, the Party appears to have been deemphasizing the term MCF in public, in favor of “integrated national strategic systems and capabilities.” Xi’s work report to the 20^th Party Congress in October 2022 omitted any mention of MCF, only calling for “consolidating and enhancing integrated national security strategies and capabilities,” and then addressing many of the components traditionally associated with MCF.

Detailed explanation of aspects summarised as takeaways above

The PRC pursues its MCF strategy as a nationwide endeavor that seeks to meld its economic and social development strategies with its security strategies to build an integrated national strategic system and capabilities in support of China’s national rejuvenation goals. The Party’s leaders view MCF as a critical element of their strategy for the PRC to become a “great modern socialist country” which includes becoming a world leader in science and technology (S&T) and developing a “world-class” military.

Although the PRC’s MCF strategy includes objectives to develop and acquire advanced dual-use technology for military purposes and deepen reform of the national defense S&T industries, its broader purpose is to strengthen all of the PRC’s instruments of national power by melding aspects of its economic, military, and social governance. MCF strives to establish an infrastructure that connects the military and civilian sectors in a way that serves as a catalyst for innovation and economic development, yields an effective unity of effort in advancing dual-use technologies, especially those suited for “intelligentized” warfare, and facilitates effective industrial mobilization during wartime.

Development and Significance. The Party has explored the concept of leveraging or integrating the combined contributions of the military and civilian sectors since the PRC’s founding. The current MCF concept initially took root in the early 2000s as the Party sought methods to enhance the PRC’s overall development. This led Party leaders to call for improving “military-civilian integration” that echoed the collaboration between the defense and civilian sectors that China observed in the United States and other developed countries. Implementation of these efforts stalled due to a lack of centralized government control and the organizational barriers that exist across the party-state. Coinciding with the 11^th FYP (2006-2010), the PRC began replacing “military-civilian integration” with “military-civilian fusion.” In 2007, Party officials publicly noted the change from “integration” to “fusion” was not merely cosmetic but broadened the scope to include all available economic resources in the promotion of the defense industry.

Since that time, MCF’s ambitions have grown in scope and scale as the Party has come to view it as a means to bridge the PRC’s economic and social development with its security development in support of the PRC’s national strategy to renew China. As such, the Party has continued to elevate MCF’s importance. In 2015, the CCP Central Committee elevated the MCF Development Strategy to a national-level strategy to serve as a bridge between the PRC’s national development strategy and its national security strategy, later also adding building “integrated national strategic systems and capabilities” (一体化的国家战略体系和能力), both of which support the PRC’s goal of national rejuvenation.

Since early 2022, the Party appears to have been deemphasizing the term MCF in public, in favor of “integrated national strategic systems and capabilities.” This term appears to have originated in June 2017 when Xi addressed the first meeting of the Central Committee’s Central Commission for Military-Civil Fusion Development and charged them with gradually building up “China’s integrated national strategic systems and capabilities.” Xi used “integrated national strategic systems and capabilities” in conjunction with “military-civilian fusion” in his 2017 speech to the 19^th Party Congress, suggesting that completion of major projects, achievements in defense research, and improved MCF would contribute to building the PRC’s overarching integrated national strategic systems and capabilities. In December 2017, three PLA National Defense University (NDU) scholars published a study expanding on that concept, asserting that MCF was part of a near-term goal to establish basic “deep development patterns.” The NDU academics maintained that once that was accomplished, the PRC could move on to its ultimate goal of building “integrated national strategic systems and capabilities.” Notably, the language in the study closely mirrored that of national policies, making it possible that the authors played a significant role in helping draft the strategy. Their interpretation of Xi’s speech was supported by numerous other writings that came out following the 19^th Party Congress in 2017.

Xi’s work report to the 20^th Party Congress in October 2022 omitted any mention of MCF, only calling for “consolidating and enhancing integrated national security strategies and capabilities,” and then addressing many of the components traditionally associated with MCF. This same formulation was used in March 2023 by Xi and CMC Vice Chairman Zhang Youxia in their separate addresses to PLA and People’s Armed Police delegates to the 14^th National People’s Congress. Provincial party officials responsible for MCF were already publicly using the phrase “integrated national strategic systems and capabilities” and avoiding the term MCF in the months leading up to the 20^th Party Congress. It is not clear whether Party leadership believes that China has met all the conditions to move beyond MCF. However, an article published in the PLA Daily in December 2022 stated that the process of enhancing integrated national strategic systems and capabilities will “quicken the pace of national defense and armed forces building” and “greatly enhance the strategic confrontation capability of the national system.”

Management and Implementation. The overall management and implementation of the MCF Development Strategy involves the most powerful organs in the party-state: the Politburo, the State Council (notably the National Development and Reform Commission), and the CMC. In addition to signifying its importance, the CCP Central Committee’s elevation of the MCF Development Strategy to a national-level strategy also was intended to overcome obstacles to implementation across the party-state.

This elevation led to the establishment of the Central Commission for Military Civilian Fusion Development (中央军民融合发展委员会) (CCMCFD) in 2017, chaired by General Secretary Xi Jinping, Premier Li Qiang, several other members of the Politburo Standing Committee, two State Councilors, both CMC Vice Chairmen, 12 Ministry-level leaders, and others. The stated objective of the CCMCFD is to build the PRC’s “national strategic system and capabilities.” This commission works to improve the “top-level design” of MCF and overcome impediments to implementation. The elevation of the MCF Development Strategy and the creation of the CCMCFD signals the importance that Party leaders place on MCF and the scope and scale of the strategy’s ambitions.

The PRC pursues MCF through six interrelated efforts. Each effort overlaps with the others and has both domestic and international components. The Party seeks to implement the MCF Development Strategy across every level of the PRC from the highest national-level organs down to provinces and townships and creates top-down financing and regulatory mechanisms that incentivize civilian and military stakeholders – such as local governments, academia, research institutions, private investors, and military organizations – to combine efforts on dual-use technologies. The PRC refers to these six aspects as “systems,” which may also be understood as mutually supporting lines of effort or components. The six systems in the MCF Development Strategy are as follows:

The Advanced Defense Science, Technology, and Industrial System. This system focuses on fusing the PRC’s defense industrial base and its civilian technology and industrial base. This includes expanding the private sector’s participation in the PRC’s defense industrial base and supply chains as well as improving the efficiency, capacity, and flexibility of defense and civilian industrial and manufacturing processes. This broader participation seeks to transfer mature technologies both ways across military and civilian sectors, with the goal to produce outsized benefits for both. This also aims to increase the competitiveness within the PRC’s defense industrial base in which one or two defense SOEs dominate an entire sector. This MCF system also seeks to advance the PRC’s self-reliance in manufacturing key industrial technologies, equipment, and materials to reduce its dependence on imports, including those with dual-uses. The PRC’s MCF-influenced industrial and technology endeavors include Made in China 2025, which sets targets for the PRC to achieve greater self-sufficiency in key industrial areas such as aerospace, communications, and transportation.

The Military-Civil Coordinated Technology Innovation System. This MCF system seeks to maximize the full benefits and potential of the country’s S&T development. Consistent with the CCP leadership’s view that high technology and innovation are critical to strengthening China’s comprehensive national power, this system develops and integrates advanced technologies across civilian and military entities, projects, and initiatives—with benefits flowing in both directions. This includes using cutting-edge civilian technology for military applications or to more broadly advance military S&T as well as using military advancements to push civilian economic development. Although related to the Advanced Defense Science, Technology, and Industrial System, this system largely focuses on fusing innovations and advances in basic and applied research. Specific efforts in this MCF system include strengthening and promoting civilian and military R&D in advanced dual-use technologies and cross-pollinating military and civilian basic research. Additional efforts include promoting the sharing of scientific resources, expanding the institutions involved in defense research, and fostering greater collaboration across defense and civilian research communities. This system also seeks to foster “new-type” research institutions with mixed funding sources and lean management structures that are more dynamic, efficient, and effective than the PRC’s wholly state-owned research bodies. Examples of MCF-influenced dual- use S&T endeavors include the PRC’s Innovation Driven Development Strategy and Artificial Intelligence National Project.

The Fundamental Domain Resource Sharing System. This system includes building military requirements into the construction of civilian infrastructure from the ground up as well as leveraging China’s civilian construction and logistics capacities and capabilities for military purposes. This includes factoring military requirements and dual-use purposes into building civilian private and public transportation infrastructure such as airports, port facilities, railways, roads, and communications networks. This also extends to infrastructure projects in dual-use domains such as space and undersea as well as mobile communications networks and topographical and meteorological systems. Another element seeks to set common military and civilian standards to make infrastructure easier to use in emergencies and wartime. This aspect of MCF has arguably the greatest reach into the PRC’s local governance systems as military requirements inform infrastructure construction at the province, county, and township levels. The influence of this aspect of MCF is visible in the PRC’s major land reclamations and military construction activities in the SCS, which brought together numerous government entities, the PLA, law enforcement, construction companies, and commercial entities. It may also have important implications for the PRC’s overseas infrastructure projects and investments under BRI as the PRC seeks to establish a more robust overseas logistics and basing infrastructure to allow the PLA to project and sustain military power.

The Military Personnel (Talent) Cultivation System. This MCF system seeks to blend and cultivate military and civilian S&T expertise through education programs, personnel exchanges, and knowledge sharing. The purpose of this effort is to improve the utilization of experts able to participate in S&T projects irrespective of whether they are military or civilian (or even foreign) experts and allow expertise to flow more freely across sectors. This aspect of MCF also seeks to reform the PRC’s talent cultivation system, which encompasses hundreds of talent recruitment plans, in order to improve China’s human capital, build a highly skilled workforce, and recruit foreign experts to provide access to know-how, expertise, and foreign technology. It takes into account all levels of education from the Party’s nationwide “patriotic education” programs for children to the matriculation of post-doctorate researchers within China and at institutions abroad. Many of the PRC’s named talents programs are likely influenced by MCF planning, as are reforms in its military academies, national universities, and research institutes.

The Socialized Support and Sustainment System for the PLA. This system entails two major efforts that seeks to shift the PLA away from its inefficient self-contained logistics and sustainment systems and towards modern streamlined logistics and support services. First, it seeks to harness civilian public sector and private sector resources to improve the PLA’s basic services and support functions—ranging from food, housing, and healthcare services. The concept is to gain efficiencies in costs and personnel by outsourcing non-military services previously performed by the PLA while also improving the quality of life for military personnel. Second, it seeks to further the construction of a modern military logistics system that is able to support and sustain the PLA in joint operations and for overseas operations. This system seeks to fuse the PLA Joint Logistic Support Force’s (JLSF’s) efforts to integrate the military’s joint logistics functions with the PRC’s advanced civilian logistics, infrastructure, and delivery service companies and networks. These arrangements seek to provide the PLA with modern transportation and distribution, warehousing, information sharing, and other types of support in peacetime and wartime. This fusion also seeks to provide the PLA with a logistics system that is more efficient, higher capacity, higher quality, and global in reach.

The National Defense Mobilization System. This MCF system binds the other systems as it seeks to mobilize the PRC’s military, economic, and social resources to defend or advance China’s sovereignty, security and development interests. The Party views China’s growing strength as only useful to the extent that the party-state can mobilize it. China characterizes mobilization as the ability to precisely use the instrument, capability, or resource needed, when needed, for the duration needed. Within the PLA, 2015-16 reforms elevated defense mobilization to a department called the National Defense Mobilization Department (NDMD), which reports directly to the CMC. The NDMD plays an important role in this system by organizing and overseeing the PLA’s reserve forces, militia, and provincial military districts and below. This system also seeks to integrate the state emergency management system into the national defense mobilization system in order to achieve a coordinated military-civilian response during a crisis. Consistent with the Party’s view of international competition, many MCF mobilization initiatives not only seek to reform how the PRC mobilizes for war and responds to emergencies, but how the economy and society can be leveraged to support the PRC’s strategic needs for international competition.

MCF Linkages. Each MCF system entails linkages between dozens of organizations and government entities, including:

• Ministry-level organizations from the State Council: Examples include the National Development and Reform Commission, Ministry of Foreign Affairs, Ministry of Industry and Information Technology, Ministry of Education, and key state entities such as the State Administration of Science and Technology in National Defense and others.

• Lead military organs subordinate to the Central Military Commission: CMC Strategic Planning Office, Joint Political, Logistics, and Equipment Development Departments, as well as operational units and the regional military structure at the Military District and Sub-District levels; military universities and academies such as National Defense University, Academy of Military Science, National University of Defense Technology, and service institutions.

• State-sponsored educational institutions, research centers, and key laboratories: Prominent examples include the “Seven Sons of National Defense” (Harbin Institute of Technology, Nanjing University of Science and Technology, Northwestern Polytechnical Institute, Beijing Institute of Technology, Harbin Engineering University, Beihang University, Nanjing University of Aeronautics and Astronautics), as well as certain PLA-affiliated laboratories of Tsinghua University, Beijing University, and Shanghai Jiaotong University, North University of China, and others.

• Defense industry: The ten major defense SOEs continue to fill their traditional roles providing weapons and equipment to the military services. Many defense SOEs consist of dozens of subsidiaries, sub-contractors, and subordinate research institutes.

• Other SOEs and quasi-private companies: High profile examples include PRC high-tech corporations and important SOEs like COSCO, China National Offshore Oil Company, and major construction companies that have roles in BRI projects as well as helping the PRC build out occupied terrain features in the SCS.

• Private companies: MCF efforts also seek to increase the proportion of private companies that contribute to military projects and procurements. These enterprises include technology companies that specialize in unmanned systems, robotics, artificial intelligence, cybersecurity, and big data.

• Multi-stakeholder partnerships: In practice, many MCF efforts involve partnerships between central, provincial, or city government entities with military district departments, PLA departments, academia, research entities, and companies. A majority of provincial and local governments have announced MCF industrial plans, and more than 35 national-level MCF industrial zones have been established across China. MCF-linked investments funds created by central and local governments and private investors total in the tens of billions of dollars.

COMING UP: DETAILED ANALYSIS WITH INDIAN PERSPECTIVE

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