BEIJING has compensated the People's Liberation Army (PLA) 1.3 billion yuan (HK$1.16 billion) for turning over army mines to civilian authorities in Shanxi, a Chinese scholar revealed in the United States. In Hawaii to take part in a political science conference, Dr Wang Shaoguang, a consultant of the Chinese Academy of Sciences, quoted Vice-Premier Zhu Rongji as saying in June that the 27th Army of Shanxi was ordered to hand over coal mines after receiving the money. Most of the coal mines in Shanxi have for a long time been ''monopolised'' by soldiers, coal mining authorities under the Government, and the railway industry, according to cadres and residents in the province. ''After telling of the decision, Mr Zhu said Shanxi civilians would clap and cheer,'' said Dr Wang, who is also lecturing in political science at Yale University. The 38th Army also owns profitable coal mines in the province, he said. It is believed that insufficient military funding by the Government has prompted the PLA to engage in various profit-making activities including corruption and smuggling, resulting in lax morale and poor equipment. Dr Wang urged that such activities be stopped. Corporations run by the three major headquarters - General Staff Department, General Political Department and the General Logistics Department (GLD) - should be joined under the GLD. He indicated this would lessen opportunities for corruption and make for a more efficient structure. ''It's very very hard [to achieve that]. Opposition posed by the armies is very strong,'' he said. The scholar, who has been consulted by Vice-Premier Zhu and premier Li Peng, said that the Government should bear all the cost of national defence to eliminate corruption. China, he said, was facing a very dangerous period as its finance resources appeared to be so weak they could not fulfil the army's basic role in national defence. Quoting statistics, Dr Wang said the Government's expenditure was small, taking only about 18 per cent of the gross domestic rate in 1992, much less than the 34 per cent spent by the United States. And only about one-third of China's government income in 1992 was collected by the Government. The poor funding had prompted many police, public security officers and courts to earn as much as they could, leading to a fractured army system and widespread regionalism. ''In times of any crises, can the army act as a unifying force for the nation? This is the big problem.'' Meanwhile, Dr Wang endorsed a recent report by a economist of the Chinese Academy of Sciences, Wu Angang, in which the Government was urged to inject more funds to ''feed the army'' rather than the army being responsible for its food. He estimated that in the past 15 years, military funding had only been increased by one per cent in terms of absolute value. He did not know of any country in which soldiers were doing business on the scale of PLA members. ''Worse still, all the profits are usually swallowed by army officials and not used in improving armaments.''