(Two Armed Vehicles Perform Maneuver Demonstration at Airshow China 2016)
China's defense sector is taking bold steps to be more competitive and innovative, as it prepares to mark the 90th anniversary of the founding of the Chinese People's Liberation Army on Aug 1.
A key aspect of this reform is the drive to put the nation's defense research institutes on a more commercial footing, a move which was announced at a recent conference held by the State Administration of Science, Technology and Industry for National Defense.
Work is proceeding well on such efforts at 41 institutes, which will become independent legal entities as companies. The move shows that the reform of the institutes has entered the period of its practical implementation. These research organizations have the leading technologies in their sectors, and strong research and development capabilities.
Industry insiders pointed out that the reform was unlikely to be completed until the end of 2018, noting that it is "very complicated and the pace will be steady".
Covering a large amount of employees and involving many different sectors, reform of defense research institutes is an important task for the central government in its wider reform of State institutions.
Although defense industry shares have remained stable recently, there is bullish outlook for the sector in the medium and long-term, especially in aeronautics and astronautics, as well as high-end equipment.