China’s defense sector is largely controlled by state-owned enterprises insulated from its commercial economy. However, Beijing has increasingly sought to bolster its military capabilities and modernize the People’s Liberation Army through its civilian sectors.
A key pillar of these efforts, Military-Civil Fusion (MCF) encourages Chinese civilian companies to acquire and pass along to defense firms dual-use technologies from foreign sources rather than developing them indigenously (through both legal and illegal means). MCF has had mixed success and has largely relegated the civilian tech sector as a pass-through entity rather than serving as the source of technology and expertise. Nonetheless, Beijing is likely to continue using MCF to advance its military ambitions, and Washington and its allies must therefore pay close attention to it.
This discussion will examine Beijing’s MCF practices and help shine a light on the extent to which MCF is succeeding. It will also offer insights on how the US and its allies and partners can best counter MCF.
ORIGINAL AIRDATE: 09/27/23