THE MANAGEMENT OF CHINA'S ELECTRONICS INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000101090001-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: November 9, 2009
• Sequence Number: 1
• Publication Date: March 11, 1985
• Content Type: REPORT

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The Management of China's Electronics Industry
This paper provides background on the organizations involved
in the planning, management, and foreign trade of China's
electronics sector.
Leading Group for the Invigoration of the Electronics Industry
In September 1984, Beijing reorganized and renamed the
Leading Group for Computers and Large-Scale Integrated Circuits,
which had been charged since 1983 with overseeing the development
of these products. At the same time, Vice Premier Li Peng
replaced Vice Premier Wan Li as the chairman of the Leading
Group. In addition, the membership of the Leading Group was
broadened. Ranking officials from the State Economic Commission,
the State Science and Technology Commission, the National
Defense, Science Technology and Industry Commission, the People's
Bank of China, and the Ministries of Electronics, Machine
Building, Post and Telecommunications, Railroads, and Water
Resources and Electric Power all serve on the new leading
group. (See Figure 1)
The Leading Group for the Invigoration of the Electronics
Industry is charged with strengthening. centralized leadership
over electronics and information enterprises. Its functions
include: formulating development goals and general strategies;
approving key plans and supervising their implementation;
coordinating research and production, and examining and approving
the imports planned for major projects.
The new Leading Group has defined the strategic goal of the
electronics industry as developing "microelectronics technology
as the foundation, and computer and telecommunications equipment
STAT
STAT
STAT
This unclassified memorandum was prepared by
of the Office of East Asian Analysis in response to a
Development, Department of Commerce. Questions and comments are
welcome and may be addressed to Chief, China Division,
request from the Deputy Assistant Secretary for Trade
EA M 85/10048
STAT
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 Figure 1
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China's Research and Development Community
Policy Elements
S
tate Council
[pa,lymCentral
mittee
Leading Group for
Center for Techno-
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Invigoration of
Central Mili-
Militar
Economic Research
Leading Group
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C
Electronics
tary Commis-
Commission
hair: Ma Hong
Head: Premier Zhao Z)yang
Head: Vice
sion
Chair: Deng Xiaoping
Chinese Associ
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Deputies: Fang Yi,
Chair: Den
a
on
Song Ping
Premier LI Peng
g
for Science and
Xiaoping
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Chair: Zhou Peiyuan
tate Economic
State Planning
State Science and
Commission (SEC)
Commission (SPC)
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National Defense
Min: Lu Don
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Science
China SST
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Min: Song Ping
Minister: Son
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Technology
and
Consultative
Vice Ministers: Guo Shuyan,
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Industry
Service Center
Zeng Xianlin, Wu Mingyu,
Commission
President
Yang Jun, Teng Teng
Lin Bomin
Commissioners:
Yang Weizhe. Wu Xing,
(Responsible for
Hu Zhaosen
national defense
Zia Weiwen, Xie Shaoming
S&T plans and im-
plementation in
? SST Policy Department
concert with SPC
office for annual plans and and SEC)
implementation
? National Research Center
for SST for Development
? Institute for SST Information
of China
Director: Lin Zixin
? Key Projects Coordination
Department
Head: Jia Weiwen
? Bureau of Technology
Director: Hu Zhaosen
ovinciat SST
search Institutes
rChinese Academy of Chinese Academy of Science
1 Social Sciences (CASS) (CAS)
President: Ma Hong President: Lu Jiaxi
Ministry of Education (MOE)
Minister: He Dongchang
Industrial Ministries
Research Academies
and Institutes
Defense Ministries
Research Institutes
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as the main body." The Chinese press reports this goal has been
adopted by the State Council and will be emphasized in China's
Seventh Five Year Plan (1986-1990), soon to be announced.
The Ministry of Electronics Industry
MEI, formerly the Fourth Ministry of Machine Building,
coordinates one of China's most rapidly developing industrial
sectors. The Ministry directs applied electronics research and
manages the development and production of electronics products
for both civilian and military needs.
MEI controls some 2,400 enterprises employing more than
90,000 engineers and technicians and one million additional non-
technical personnel. Although MEI manages some of these
enterprises directly, control of most of them has been delegated
to provincial, municipal, and county organizations, which receive
planning guidance from the Ministry. In addition to MEI and to
provincial and municipal authorities, the Ministries of Posts and
Telecommunications, Astronautics, Machine Building, Light
Industry, and the Chinese Academy of Sciences all produce
electronic goods for their own uses.
Industrial bureaus subordinate to the MEI include:
-- Bureau of Radar Industry - responsible for manufacturing
various ground, weather, and airborne and shipboard
radars.
-- Bureau of Communications, Broadcast and Television -
responsible for communication, navigation and broadcasting
equipment, television sets, radios, and tape recorders.
-- Bureau of Computer Industry - responsible for
manufacturing computers, peripherals and related
equipment; controls research, production, imports, and
product distribution for a number of institutes and
factories; provides staff support for and policy
recommendations to MEI and the Leading Group; controls
China Software Technology Corporation (CSTC) and China
Computer Technical Service Corporation (CCTSC)--companies
that form joint ventures with foreign firms for software
development and for computer maintenance and service.
-- Bureau of Electronic Components and Devices - responsible
for manufacturing vacuum tubes, semiconductor devices,
integrated circuits, electronic instruments, special
processing equipment, and electronic materials.
Electronics research controlled by the Ministry comes under
the direction of four research academies. Institutes conduct
research for the academies. At least 55 such institutes are
subordinate to the MEI.
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The MEI also controls several specialized import-export
corporations to acquire equipment and technology from foreign
sources. These include the China Electronics Import-Export
Corporation (CEIEC) and the China National Electronic Devices
Corporation (CNEDC). CEIEC has branches in Guangzhou, Shenzhen,
Shanghai, Tianjin, Beijing, and most provinces. (See Figure 2)
Inter-Ministerial Regional Corporations
Regional electronics corporations, composed of factories and
institutes engaged in the production of similar goods, have been
or are being formed in major cities. These regional combines are
being formed to reduce the duplication of research being done by
various institutes, to coordinate factories' imports of equipment
and materials, to facilitate the sharing of technical information
between institutes and factories, and to ensure that components,
computers, and telecommunications equipment are compatible with
one another. Examples include:
-- The Nanjing Radio Company, an integrated complex composed
of 37 factories, and provincial and municipal
authorities.
-- The Shanghai Software Technological Development Center,
which comprises six universities, two institutes, and
various municipal entities.
-- The Shanghai Computer Company, which includes two computer
factories, a telecommunications.factory, an instrument
factory, a research institute and municipal organizations.
-- The Shenyang Computer United Corporation, which includes
11 production and research units.
Formation of such regional corporations is only one of the
means Beijing is using to remove the institutional barriers to
progress in the production of electronic goods. Beijing is now
embarked on a major reform of its entire scientific and
technological system, aimed at improving the flow of technology
between institutes and factories, between military and civilian
sectors, and among factories spread across several ministries.
To foster the internal transfer of technology, the Chinese
leadership is encouraging the mobility of technical personnel,
creating financial incentives for institutes to work closely with
factories on the development of new products and production
techniques, and placing a large number of institutes formerly
controlled by the Chinese Academy of Sciences under the direct
control of industrial ministries. All sectors are involved in
this effort, but the electronics industry is the focal point for
many of the reforms.
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rIgure 2
Ministry of Electronics Industry
Management
Computer Industr (Electronic Components
China Computer
Technical Service
Corporation
Foreign Trade
China Electronics China National
Import-Export Electronics Devices
Cor oration import-Export
Cor oration
Regional Branches
of CEIEC
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The Buyers
A large and increasing number of corporations are involved
in China's imports of semiconductor production technology and
equipment. At the national level, there are several trading
corporations under the Ministry of Foreign Economic Relations and
Trade, the Ministry of Electronics Industry, and each of the
defense industrial ministries. Buying corporations are also
operated by the Chinese Academy of Sciences, the National
Defense, Science, Technology and Industry Commission, and the
State Science and Technology Commission. (See Table 1.)
In addition to the national level trade corporations, the
current decentralization of China's foreign trade has given rise
to a number of regional or municipal-level trade organizations.
The number of local traders is multiplying rapidly, and the value
of the purchases many are authorized to make--as well as their
authority to sign cooperative production agreements--remains
unclear. The regional corporations most actively involved in
electronics procurement are located in Shanghai, Tianjin, and the
Shenzhen Special Economic Zone.
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Table 1
National Electronics
Trade Corporations
Corporation
China Electronics Import-
Export Corporation
China National Electronic
Devices Corporation
China Great Wall Industry
Corporation
China Precision Machinery
Import-Export Corporation
China Yanshan Science and
Technology Corporation
Xiaofeng Technology and
Equipment Corporation
Xinshidai Company
Oriental Scientific Instruments
Import-Export Corporation
China Scientific Instruments
and Materials Corporation
China Electronic System
Engineering Corporation
China National Instruments
Import-Export Corporation
China National Technology
Import-Export Corporation
Subordination
Ministry of Electronics
Industry (MEI)
Ministry of Astronautics
Industry (MOAI)
National Defense Science
Technology and Industry
Commission (NDSTIC)
Chinese Academy of Science
State Science and
Technology Commission
Ministry of National
Defense
Ministry of Foreign
Economic Relations and
Trade (MFERT)
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