(Xinhua)
Updated: 2007-12-25 23:48

China is set to complete the shareholding reform of its military industries within five years and will raise 50 billion-60 billion yuan ($6.82 billion-$8.18 billion) from the capital markets for this purpose by the end of 2010.

"The overwhelming majority of military industry enterprises will be allowed to raise direct financing from the capital market. Military firms are encouraged to be listed on the market," China Securities Journal quoted Wu Fenglai, director of the Commission of Science, Technology and Industry for National Defense (CSTIND) as saying.

Wu noted that it was a good time for military industries to further their reforms, with the economy and capital markets doing well.

Military manufacturers began reforms several years ago but have only made slow progress due to the lack of explicit policies. Statistics show that only 22.5 percent of these enterprises have implemented shareholder reform.

The government has promulgated regulations to boost the defense industry this year. These moves include allowing domestic and foreign investors to acquire shares in military firms of lower strategic value.

"Foreign investors are allowed to conditionally participate in the shareholding restructuring of China's military industry, while companies that design and produce strategic and other major weapons that involve core state secrets and have a direct bearing on national security will be  still under state control," said CSTIND in a statement on its website.