Rise of China’s military-industrial leaders will heat up race against the US

Wave of technocrats sweeping into government has major implications for China’s economic, tech and military advancement – and the US-China rivalry
But whether they can improve strategic coordination between the People’s Liberation Army and the party-state is less clear

Wu GuoguangandBates Gill

Published: 1:00am, 7 Mar 2023

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The surveillance balloon incident raises serious concerns about China’s military intentions towards the United States. But it raises equally troubling issues about the competence of China’s military intelligence services and their apparent lack of coordination with other elements of the Chinese party-state.

In that light, it is intriguing that an unusual and important new “faction” has emerged at the top of China’s political system: military-industrial technocrats.

As research by the Asia Society Policy Institute’s Centre for China Analysis shows, their ascent provides important clues to the leadership qualities and policy priorities that paramount leader Xi Jinping has uppermost in mind.

Moreover, their success or failure as leaders over the next 10-15 years will have major implications for China’s economic development, technological advancement and foreign relations, especially as rivalry with the US intensifies. They might also have a role in improving China’s defence intelligence capacities, both technically and bureaucratically.

With the closing of 20th party congress last October, 13 new members joined the 24-man Politburo, the Communist Party’s top leadership body. Among them are five rising stars: Zhang Guoqing, Yuan Jiajun, Li Ganjie, Ma Xingrui and Liu Guozhong.

This group – accounting for nearly 40 per cent of the Politburo’s newly appointed seats – share similarities including educational training in military-industrial engineering in fields such as aerospace, nuclear energy and ordinance.

Most possess high-level managerial experience in China’s vast military-industrial sector. And all have transformed from engineer-managers to local, then national political leaders.

They are also relatively young. With an average age of just under 60 at the time of the 20th party congress – nearly five years younger than the average age of all other Politburo members – they represent a new generation of leadership. Li Ganjie, who recently turned 59, is the youngest member.

These leaders are likely to remain influential at the very top of China’s political power structure for another decade or more.

Their rise is part of a broader wave sweeping into the upper echelons of government. Many with military-industrial backgrounds have taken on new provincial leadership positions, joined the ranks of the 20th Central Committee in other senior-level capacities, or taken ministerial posts.

Li Ganjie, then the environment minister, at the 13th National People’s Congress in Beijing on March 17, 2018. Photo: Simon Song

These engineer-managers are set to grow. With Li expected to take over the Central Organisation Department – the all-powerful body that oversees recruitment and personnel matters for the party – the leadership pipeline will no doubt include even more people from the military-industrial complex, transforming Chinese elite politics.

This new set of leaders are colloquially known as the “military-industrial group” (jungong pai) or “military industrial gang” (jungong bang). They are scientifically accomplished, business-savvy and trusted loyalists – in short, both “red” and “expert”, all valued qualities in top leadership under Xi.

As such, they will be pivotal to China’s future in three crucial policy areas: economic development, technological advancement and relations abroad, especially regarding the increasingly contentious rivalry with the US.

In economic development, these individuals are likely to align with Xi’s strategy to tame and harness market forces to serve the party’s ultimate interest in retaining a monopoly of power. China’s military-industrial sector appears to be an area in which party-state control and market activities have been successfully combined.

These engineer-managers-turned-political-leaders will be expected to apply their military-industrial experience to the reshaping of the Chinese economy to champion both a stronger statist framework and corporate market-economic success.

The military-industrial gang will be especially central to China’s technological ambitions, particularly the long-held goal of civil-military integration – that is, leveraging technological innovations in the civil sector to advance weapons development for the Chinese military, and vice versa.

Technology, talent and a modern military – Xi wants it all for China

This is not a new idea. But thanks to long-standing organisational stovepipes and a lack of effectively incentivised markets, China’s defence industry has struggled for decades to make the most of the country’s economic success story. This emerging leadership faction will be in a powerful position to change that.

Finally, these individuals’ pursuit of economic growth and technological innovation, including in sophisticated weaponry, will have an enormous impact on China’s relations with the world – especially regarding China’s deepening rivalry with the US, particularly between their militaries.

But it is less clear whether they’ll be able to improve strategic coordination between the People’s Liberation Army (PLA) and the party-state. While “the party commands the gun”, as Xi put it in 2014, often the party may not know what the gun is doing, as the balloon episode suggests.

That is unlikely to change very soon. Even after massive personnel cuts over the past two decades, the PLA, still the world’s largest military, remains an enormous institution not easily managed. Moreover, it enjoys a privileged political position as the party’s armed wing and is unaccustomed to bureaucratic oversight and “inter-agency” processes.

Like with other militaries, information-sharing and transparency are not the PLA’s strong suits. Indeed, it is not a well-integrated organisation, and still grapples with the very idea of “jointness”, even within its ranks.

Certainly, the economic, technological and military competition between the US and China will continue to intensify. The Chinese balloon over America is only the most recent episode in a decades-long contest between these two powers. The emergent military-industrial gang will be an increasingly critical factor in how this rivalry plays out.

Wu Guoguang is a senior fellow at the Asia Society Policy Institute’s Center for China Analysis and a senior research scholar at Stanford University

Bates Gill is executive director of the Center for China Analysis