The following document, issued in 2012, describes how various regulations both allow and limit the participation of private Chinese companies and investors in the PRC defense industry.
The Chinese source text is available online at: https://web.archive.org/web/20201118175216/http://www.gov.cn/zhengce/2016-05/22/content_5075643.htm
US $1 ≈ 7 Chinese Yuan Renminbi (RMB), as of December 17, 2020.
To all relevant organizations:
In order to put into practice the spirit of Certain Opinions of the State Council on Encouraging and Channeling the Healthy Development of Private Investment ([2010] No. 13), and to encourage and channel private capital into defense S&T industrial fields, and taking into consideration the realities of the defense S&T industry, the following implementation opinions have been formulated:
I. Principles and fields for encouraging and channeling private capital into the defense S&T industry
1. In accordance with the requirements of the development path of military-civil fusion (军民融合) with Chinese characteristics, we must further enlarge the fields and scope for the entry of private capital (民间资本) into the defense S&T industry, refine policies and measures for encouragement and channeling, and promote the development of weapons and equipment and the defense S&T industry. Upholding the principles of positive encouragement, correct guidance, equal treatment, and ensuring security, we should attract and encourage private capital to enter defense S&T industry fields, practice equal treatment of private investment entities (民间投资主体) and state-owned defense industry enterprises in terms of permission to enter, competition for tasks, tax incentives, etc., strengthen security, secrecy, supervision, and management, and ensure the security of state secrets.
2. Defense S&T industry fields for private capital to enter include: Scientific research and production of weapons and equipment, defense S&T industry investment and construction, defense industry enterprise reorganization and restructuring, and development of dual-use technology.