What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
62a. Formal policies
China score: 0/100
There are no laws or procedures detailing how the government discriminates in its selection of suppliers and sub-contractors, and suppliers or sub-contractors are not required to sign anti-corruption clauses in contracts with the government.
There are no laws or procedures detailing how the government discriminates in its selection of suppliers and sub-contractors, but periodically suppliers or sub-contractors may be required to sign anti-corruption clauses in contracts with the government.
There may be laws and procedures detailing how the government discrminates in its selection of suppliers and sub-contractors. Some anti-corruption standards are included in the main contract or subcontracts throughout the supply chain.
There are laws and procedures detailing how the government discriminates in its selection of suppliers and sub-contractors on the basis of their integrity. Companies may be required to show that they have a formal and publicly declared anti-corruption programme in place, but some minimum standards are not specified. These standards are included in the main contract as well as subcontracts throughout the supply chain.
There are laws and procedures detailing how the government discriminates in its selection of suppliers and sub-contractors on the basis of their integrity. For example, suppliers and sub-contractors are required to show that they have a formal and publicly declared anti-corruption programme in place that adheres to minimum standards established and specified by the procurement authority. The substance of the programme and standards are included in the main contract as well as subcontracts throughout the supply chain.
Military procurement in China until the late 2000s was a closed system regulated by the CMC and the State Administration of Science, Technology and Industry for National Defence (SASTIND) and involving a group of State Owned Enterprises researching and developing weapons for the PLA. [1,2] This changed in the early 2010s, as the PLA sought to expand synergies with the private sector and develop dual-use technologies. Despite opening up to the private sector, procurement is closely regulated by the state and dominated by SOEs, especially for research and development of weaponry.
Regarding policies and regulations, the degree of transparency is limited. Broad laws and certain CMC regulations are available, but the more technical implementation measures and regulations are not.
The Measures for the Implementation of the Scientific Research and Production Licensing of Arms and Equipment (武器装备科研生产许可实施办法 2010) outline a licensing system (with different categories according to the type of equipment) that companies need to adhere to in order to participate in the production of equipment for the PLA. According to Article 5, the State Administration of Science, Technology and Industry for National Defence is in charge of formulating the relevant requirements as well as accepting and examining applications for licensing.
Only SOEs are allowed to develop complete weapons systems or their subcomponents, while private companies can participate for non-critical subcomponents. There are 4 different types of licenses according to the nature of the programme, which are required before a company can research, produce or sell equipment to the PLA. 
There is no explicit reference to compliance programmes in available regulations but it is very likely that these exist in implementation measures and technical regulations that are not publicly available.
Still, the CMC Equipment Procurement Regulations make reference to conducting procurement with honesty (article 6) and commit to punishing abuse of power, collusion , embezzlement of procurement funds, and falsification of reports on the the quality of the equipment (Article 62), which demonstrates that anticorruption concerns are reflected in formal policies.
1. Richard A. Bitzinger, “China’s Military-Industrial Complex: Is It (Finally) Turning a Corner?,” RSIS Commentaries, November 21, 2008, https://www.rsis.edu.sg/rsis-publication/rsis/1141-chinas-military-industrial/#.Xe4mcC2Q1p8.
2. James Mulvenon and Rebecca Samm Tyroler-Cooper. China’s Defense Industry on the Path of Reform. Washington, DC: U.S.-China Economic and Security Review Commission, 2009. https://www.uscc.gov/sites/default/files/Research/REPORT_DGI%20Report%20on%20PRC%20Defense%20Industry111009.pdf.
3. Marcel Angliviel de la Beaumelle, Benjamin Spevack, and Devin Thorne. Open Arms: Evaluating Global Exposure to China’s Defence-Industrial Base. Washington, DC: C4ADS, 2019. https://static1.squarespace.com/static/566ef8b4d8af107232d5358a/t/5d95fb48a0bfc672d825e346/1570110297719/Open+Arms.pdf.
62b. Consistent implementation
China score: 50/100
There is evidence that these policies and laws are not implemented.
There is evidence that these policies and laws are rarely implemented.
There is evidence that these policies and laws are sometimes implemented.
There is evidence that these policies and laws are consistently implemented, but not always i.e. for strategically important suppliers.
There is evidence that these policies and laws are consistently implemented, including for strategically important suppliers.
The existence of a licensing system which also restricts access to the two online platforms for military procurement shows that these regulations are implemented as part of the bidding process. However, there is an overall lack of transparency through, for instance, external scrutiny or media reports.
Compare scores by country
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|Country||62a. Formal policies||62b. Consistent implementation|
|Albania||0 / 100||NA|
|Algeria||0 / 100||NA|
|Angola||0 / 100||0 / 100|
|Argentina||0 / 100||NA|
|Armenia||50 / 100||75 / 100|
|Australia||75 / 100||50 / 100|
|Azerbaijan||0 / 100||NA|
|Bahrain||0 / 100||NA|
|Bangladesh||0 / 100||NA|
|Belgium||75 / 100||NEI|
|Bosnia and Herzegovina||25 / 100||50 / 100|
|Botswana||0 / 100||NA|
|Brazil||25 / 100||75 / 100|
|Burkina Faso||0 / 100||NA|
|Cameroon||0 / 100||NA|
|Canada||0 / 100||NA|
|Chile||0 / 100||NA|
|China||0 / 100||50 / 100|
|Colombia||0 / 100||NA|
|Cote d'Ivoire||50 / 100||50 / 100|
|Denmark||50 / 100||75 / 100|
|Egypt||0 / 100||NA|
|Estonia||25 / 100||50 / 100|
|Finland||25 / 100||NEI|
|France||25 / 100||50 / 100|
|Germany||50 / 100||50 / 100|
|Ghana||25 / 100||25 / 100|
|Greece||50 / 100||75 / 100|
|Hungary||0 / 100||NA|
|India||50 / 100||50 / 100|
|Indonesia||75 / 100||75 / 100|
|Iran||0 / 100||NA|
|Iraq||0 / 100||0 / 100|
|Israel||50 / 100||NEI|
|Italy||75 / 100||100 / 100|
|Japan||75 / 100||100 / 100|
|Jordan||0 / 100||NA|
|Kenya||50 / 100||25 / 100|
|Kosovo||25 / 100||50 / 100|
|Kuwait||0 / 100||NA|
|Latvia||50 / 100||75 / 100|
|Lebanon||50 / 100||50 / 100|
|Lithuania||25 / 100||25 / 100|
|Malaysia||25 / 100||NA|
|Mali||0 / 100||25 / 100|
|Mexico||0 / 100||NA|
|Montenegro||50 / 100||0 / 100|
|Morocco||0 / 100||NA|
|Myanmar||0 / 100||NA|
|Netherlands||25 / 100||75 / 100|
|New Zealand||50 / 100||100 / 100|
|Niger||50 / 100||0 / 100|
|Nigeria||0 / 100||NA|
|North Macedonia||50 / 100||100 / 100|
|Norway||75 / 100||100 / 100|
|Oman||0 / 100||NA|
|Palestine||0 / 100||NA|
|Philippines||25 / 100||50 / 100|
|Poland||50 / 100||25 / 100|
|Portugal||0 / 100||NA|
|Qatar||0 / 100||NA|
|Russia||0 / 100||NA|
|Saudi Arabia||0 / 100||NA|
|Serbia||0 / 100||NA|
|Singapore||50 / 100||75 / 100|
|South Africa||50 / 100||NEI|
|South Korea||100 / 100||50 / 100|
|South Sudan||0 / 100||NA|
|Spain||25 / 100||25 / 100|
|Sudan||0 / 100||NA|
|Sweden||25 / 100||75 / 100|
|Switzerland||75 / 100||NEI|
|Taiwan||50 / 100||50 / 100|
|Tanzania||50 / 100||NEI|
|Thailand||0 / 100||0 / 100|
|Tunisia||25 / 100||100 / 100|
|Turkey||0 / 100||NA|
|Uganda||0 / 100||NA|
|Ukraine||50 / 100||75 / 100|
|United Arab Emirates||25 / 100||NA|
|United Kingdom||50 / 100||25 / 100|
|United States||100 / 100||75 / 100|
|Venezuela||0 / 100||NA|
|Zimbabwe||25 / 100||NEI|