Insider Reveals Sudden Decrease in Chinese Military Production for Unknown Reasons

On November 21, 2022, an explosion occurred at a chemical plant in Taiyuan, Shanxi. (Video screenshot composite)

(November 13, 2024) – An insider working at a military industrial subcontractor for a major Chinese state-owned enterprise recently revealed that since October of last year, batch orders for military products have suddenly stopped. It is speculated that the Chinese Communist Party (CCP) may have realized, due to the Russia-Ukraine war, that its weaponry does not meet the needs of modern warfare and has accelerated the development of new products. Some military analysts believe that the reduction in military production coincides with the CCP’s recent large-scale purge of the military-industrial sector, suggesting a possible link.

Sudden Decline in Military Production Orders Reported by an Insider in a Mainland Military Enterprise

Insider Wang Gang (pseudonym) originally worked as a frontline employee at a company under the China Aerospace Science & Industry Corporation (CASIC). He later left this company and moved to a private enterprise that collaborates with his former employer.

Wang recently disclosed to Epoch Times reporters that when he joined his current company in May of last year, there was a large volume of production tasks for military products. However, by October, the batch production orders suddenly ceased, leaving only scattered tasks.

“For instance, an order for 30 to 50 pieces of a single part would be considered a large quantity, but even such orders are rare. Most orders are for three to five pieces.”

He explained that one day, the boss from his previous company called to ask about the production tasks in Wang’s new position. This boss also takes on military production tasks for a large state-owned enterprise and mentioned that batch production orders had similarly disappeared on his end, with some current orders dating back three or four years.

Wang did not specify the type of military products his company produces, and Epoch Times could not obtain additional sources regarding the sudden reduction in military production.

According to Wang, large state-owned enterprises are surrounded by numerous private subcontractors who rely on military production tasks. When military orders from state enterprises decline, these private subcontractors face significant challenges.

“For example, in August of this year, the state-owned enterprise I used to work for decided to reduce the number of subcontractors from 50-60 to just eight. Even with fewer subcontractors, we’re still struggling to get tasks. You can imagine how difficult it must be for those companies that were cut off entirely. My previous boss obtained a production permit for weaponry, reached an agreement with that state-owned enterprise, and partnered with others to buy 3 million yuan worth of new equipment to ramp up production. But with the changes, he’s had to lay off employees, and those remaining don’t know how long they can keep going. The pressure is overwhelming.”

Public information shows that China Aerospace Science & Industry Corporation (CASIC) is a major state-owned enterprise primarily engaged in missile systems and aerospace equipment research, design, manufacturing, launching, and maintenance. CASIC focuses on developing missile weapon systems, miniature satellite technology, solid-fuel rockets, and information technology.

Wang mentioned that his boss speculated the lack of large-scale military orders could be due to a security breach, preventing further production. However, other sources suggest it might be due to the CCP’s realization, from observing the Russia-Ukraine war, that their weapons are outdated, often missing targets, and unsuitable for modern warfare. As a result, they may have decided to halt previous military products and focus on new development.

Political commentator Li Linyi analyzed that solely relying on the information about reduced production tasks from a single state-owned enterprise or some associated private companies might not be enough to conclude that China’s weapons are outdated based on the Ukraine conflict. However, there is ongoing Western suspicion that Chinese companies may be supplying lethal weapons to Russia for use in Ukraine. Recently, Ukraine accused China of supplying approximately 60% of the foreign parts found in Russian weaponry used on the battlefield. So, it’s possible that China recognized its weapons or components are unsuitable for modern warfare.

Li further suggested that the reduction in military production tasks is likely related to the CCP’s large-scale purge of the military equipment sector over the past year. Many high-ranking leaders in military industries have faced consequences, impacting operations and causing some cooperating private companies to lose contracts or production tasks.

In July of last year, the Central Military Commission’s Equipment Development Department released a notice on the National Military Equipment Procurement Information Network, openly soliciting leads on irregular military equipment procurement since October 2017, aiming to crack down on corruption in equipment procurement.

Following this, several senior officials in the equipment department, including former Minister of Defense Li Shangfu, as well as leaders from CASIC, such as Chairman Yuan Jie and Deputy General Manager Wang Changqing, were removed from their positions.

Corruption and Safety Risks in CCP’s Outsourcing of Military Production

Under the banner of “military-civilian integration,” the CCP has engaged in extensive outsourcing of military production for decades. While this approach has expanded production, it has also led to persistent corruption and safety risks.

In 2014, at Shenyang Aircraft Corporation, part of the Aviation Industry Corporation of China (AVIC), a workshop director discovered a major corruption scandal and reported it to higher authorities, only to face retaliation. He later revealed to Epoch Times that nearly every factory in Shenyang Aircraft Corporation outsourced production projects and that corruption was rampant. In many cases, funds were withdrawn even before aircraft components were produced. Military aircraft frequently experienced malfunctions, with many military planes containing serious safety hazards.

The workshop director also disclosed that, in 2007, parts for J-8 and J-11 fighter jets were actually manufactured by temporary workers from eight small subcontracted factories, resulting in poor quality and several major accidents. Some defective parts were swapped out using bribes, while others were installed on aircraft, posing safety risks.

Statistics show that from January to November 2016 alone, China’s army, navy, and air force lost 10 aircraft, including four navy fighters, four air force fighters, and one aircraft each from the army and an aviation school, resulting in the deaths of seven pilots.

On November 11, Shen Ming-shih, director of the Institute for National Defense and Security Research in Taiwan, told Epoch Times that in recent years, as China promoted “military-civilian integration,” a large portion of military products continued to be outsourced to private companies. In this process, officials found opportunities to manipulate budgets. “The so-called military-civilian integration allows for inflated budgets, with some funds going directly into personal pockets. There’s a significant opportunity for this,” he said.

He explained, “Corruption often involves taking kickbacks, leading to direct losses for the manufacturers. To avoid losses, manufacturers may cut corners or use inferior materials. Then, through bribes, the products pass inspections easily. This is similar to the shoddy construction seen in many CCP projects.”

Can Backtracking and Regulation Stop Corruption?

On November 9, Xinhua News reported that CCP Chairman Xi Jinping signed an order releasing the Military Equipment Support Regulations, which will come into effect on December 1 of this year. The regulations are said to optimize processes for equipment support in “supply, management, and maintenance” and strengthen constraints on equipment support operations, among other things.

Political commentator Li Linyi believes that after issues arise, the CCP typically makes some attempt at remediation by creating laws or rules as a form of closure. However, he argues that the core integrity of the military has already decayed, and external constraints will be ineffective, making these regulations little more than decorative posters on the wall.

Mark, the host of the military program Mark’s Space-Time, also doubts that Xi Jinping’s purge of the military-industrial complex can eliminate corruption in military procurement.

On November 11, Mark told Epoch Times that authorities are merely removing personnel without addressing the root of the corrupt system. “Officials buy their positions, and once they take office, they need to recoup their investment, typically by taking kickbacks. Some individuals have been caught, but many still feel they can get away with it. There may be some restraint in the short term, but in the long run, corruption will persist, and the quality of military equipment will remain unguaranteed.”

Editor: Zheng Haoyu