ABSTRACT
China is in the midst of an extensive, state-directed defense conversion program that, despite numerous obstacles, can claim a number of successes. The program is an integral part of the country’s massive, state directed, industrial modernization program launched in the late 1970s, under which hundreds of defense industrial plants have turned to civilian production. After a decade of restructuring, civilian output has moved from barely 20 percent to at least 70 percent of defense industry’s total output. This sector is now producing an impressive array of capital equipment and large quantities of consumer goods for both domestic consumption and export. There are many parallels between China and the former U.S.S.R. as both regions struggle to switch their militarized economies to more market-based, consumer-oriented systems.
