China's President Xi Jinping wants ‘PLA Inc’ to stop its song and dance, plans end for profit-making activities

PUBLISHED : Friday, 27 November, 2015, 11:58pm
UPDATED : Saturday, 28 November, 2015, 2:00am

Moves to end the People’s Liberation Army’s profit-making activities, announced by President Xi Jinping on Thursday, are aimed at solving a problem left open by an anti-corruption campaign in 1998, experts say.

For decades, the PLA has profited from accepting civilian patients at military hospitals, leasing military warehouses to commercial firms, hiring PLA song and dance troupes for public events, outsourcing military construction companies, and opening military academies and institutions to public students.

The reforms were outlined on Thursday after a three-day military conference chaired by Xi.

READ MORE: China vows military reform by 2020, with plans for new anti-corruption watchdog in PLA

“Bringing a full end to the PLA’s paid services to external parties will purify the military ethos and maintain the nature and the true colour of the people’s army,” defence ministry spokesman Yang Yujun told a press briefing yesterday to announce the overhaul.

When China opened up in 1978 to concentrate on economic development, leader Deng Xiaoping allowed PLA officers to profit from services to achieve greater self-sufficiency and cut the nation’s defence burden.

The PLA was extensively involved in economic affairs until the late 1990s, when the central leadership realised that the army’s profit-seeking operations had resulted in PLA top brass abusing their special privileges and power by promoting their business interests. Some senior naval officers reportedly sent warships abroad to smuggle home appliances and cars.

READ MORE: China hits the launch button for massive PLA shake-up to create a modern, nimble force

In 1998, president Jiang Zemin ordered the army to close its business offshoots and focus on becoming a modern, professional fighting force. Some army-run enterprises were passed to local governments, but the army also kept an interest.

Military hospitals reached the stage where 90 per cent of patients were paying civilians, the Beijing Times reported in April.

Hong Kong-based military expert Liang Guoliang said Jiang gave his orders because the government’s defence budget had reached double-digit growth after more than one decade of economic opening-up.

Shanghai-based political scientist Chen Diaoyin said Jiang had failed to stop paid-for services because he was the first civilian chairman of the PLA’s powerful Central Military Commission, which was dominated by military heavyweights.

Jiang had to make concessions to win support from influential military leaders
Chen Diaoyin

“Jiang had to make concessions to win support from influential military leaders,” Chen said. “Military hospitals and academies charging fees were small problems. The real trouble was some [local] garrisons owned property development projects, which were the real hotbed of military corruption.”

Yang said the government would soon provide details on how the fee-charging services of the PLA and People’s Armed Police would be wound up. Liang said most military paid-for services would be passed to local governments, as called for by Jiang’s commercial ban in 1998.