China’s 15th Five-Year Plan:‍ Military Modernization Amidst Internal Challenges

China’s newly released 15th Five-Year Plan (2026–2030), unveiled after the Fourth Party ‍Plenum ⁤in October 2025, signals Beijing’s continued ambition to build ​a “world-class military” by 2049. As the final major planning cycle before ⁢the 2035 benchmark for “basically achieving full modernization,”​ the plan prioritizes operational efficiency,technological self-reliance,and the Chinese Communist Party’s (CCP)⁤ absolute command.However, the plan’s rollout coincided ​with the abrupt ⁤purge of nine senior military leaders, including Central Military Commission Vice chairman he Weidong, raising questions about stability within China’s defense establishment and the potential for internal contradictions to hinder progress.

This ⁤analysis assesses the foundations laid over the past decade, examining the ‌progress ‍and current state of procurement reform and military-civil fusion –‌ the two core ‌priorities of the proposed Five-Year Plan. While visible achievements ⁢have been made in advanced ⁣weaponry and organizational streamlining,⁢ these ⁢reforms remain limited by entrenched problems within the party-state system, including the ‌dominance of state-owned enterprises, a persistent divide between military and civilian sectors,⁢ and a lack of effective oversight.

Procurement Reform ⁣and Military-Civil Fusion: A Decade of Effort

The significance of procurement reform and military-civil fusion lies within the broader ‌context of China’s military modernization agenda. ⁢Following the Five-Year Plan proposal, Central⁣ Military Commission Vice Chairman zhang youxia emphasized modernization in a People’s Daily op-ed, highlighting two key tasks: modernizing military governance and‌ deepening military-civil fusion.

Modernizing military‍ governance necessitates sweeping institutional and regulatory changes to improve efficiency and curb corruption. This includes strengthening oversight, enforcing fiscal discipline, and enhancing clarity through tighter budget controls, rigorous acquisition mechanisms, and robust supervisory systems – ⁤all critical in addressing the corruption issues underscored by recent purges.

Deepening military-civil fusion, framed as ‌“national strategic ​integration,” aims to link China’s economic and ⁤technological base directly‌ to national defense. The goal is to‌ accelerate the development of strategic ⁢capabilities in emerging technologies​ by merging “new quality productive forces” with​ “new-type combat capabilities,” effectively blurring the lines between civilian innovation and military power. While previous Chinese​ leaders have sought to align military and civilian interests,Xi Jinping’s approach is distinguished by unprecedented political centralization ‍and a whole-of-government mobilization focused on‌ concrete‌ actions rather than rhetoric.

The reform blueprint ​was codified in the 2016 Opinions on the integrated development of Economic and Defense Construction and subsequent Five-Year Plans, aiming to​ establish a party-directed, state-controlled, and market-oriented model. This led to a major procurement ⁢overhaul ‍in 2016,with the dismantling of the opaque and⁣ corruption-prone‌ General Armaments Department.⁢ Its functions ‍were‌ redistributed to the Equipment Development Department and the Logistics Support Department, operating under a more centralized management structure,‍ while allowing individual services to manage acquisition programs. Furthermore, the Science and⁣ Technology Commission was elevated to report⁤ directly to the Central Military​ Commission, expanding its authority‍ to steer defense science policy and advance military-civil fusion.

These institutional changes were accompanied by reforms to procurement processes, including the introduction ‌of official online procurement platforms to broaden competitive ⁣bidding, pricing regulations for civilian contractors‌ to standardize acquisition, and the publication‌ of military equipment catalogs to​ signal research and development needs and promote dual-use innovations. The People’s Liberation ‌Army (PLA) also moved to professionalize its military representative officer system – ⁣responsible for supervising civilian defense research and manufacturing – to improve efficiency and‍ reduce redundancy. By 2022,the government had established over 30 industrial exhibition bases,offering tax‌ incentives,subsidies,and infrastructure support to encourage civilian firms to enter ‌the⁣ defense supply‌ chain.

These reforms have⁢ yielded visible results, notably in research ⁢and⁤ development.⁤ The integration of civilian universities, private firms, and research institutes has enhanced the continuity of long-term dual-use technology development programs in areas like artificial intelligence (AI), quantum science, aerospace, and cyberspace. This has led to‍ advancements in hypersonic ​glide vehicles, unmanned ⁣swarm systems, and sophisticated AI-enabled command, control, communications, computers, intelligence, surveillance, and‌ reconnaissance technologies.

Enduring Structural​ Problems and Contradictions

Despite these ⁢gains,deeper,unresolved challenges persist. The difficulties facing military procurement and military-civil fusion are rooted in the institutional fabric of the broader party-state system. These limitations manifest⁣ in three key areas:

Dominance of ‌State-Owned⁢ Conglomerates

China’s defense industrial base ‌remains overwhelmingly dominated⁣ by ten ⁤state-owned conglomerates, such as Aviation Industry Corporation of china and China Electronics Technology Group Corporation. These firms enjoy ‍privileged access to state financing and political backing,crowding ⁣out private competitors and⁢ stifling innovation. As ⁣Tai ‍Min Cheung observes, these enterprises represent the “Party’s institutional backbone but its economic bottleneck.”

Despite studying foreign models, including the U.S. defense ‌industrial ecosystem, China’s implementation has been ⁤piecemeal. State-owned enterprises continue to dominate across all critical domains, and their executives hold powerful positions within the party-state hierarchy, influencing procurement authorities and often resulting in contracts with vague specifications and weak⁣ performance benchmarks. A ⁤2024 Center for Strategic and International⁤ Studies study found that ⁣Chinese state-owned enterprises among the​ world’s‍ largest 500 corporations posted a return on total assets of just 1.2 percent,compared to 3.2 percent for Chinese private firms, highlighting their⁤ inefficiencies.

Entrenched Civil-Military Divide

Despite rhetoric ⁤about “fusion,” ​the civil-military divide remains deeply entrenched. ​The country lacks the institutional⁤ foundations for⁢ obvious, efficient,‍ and mutually ⁤beneficial cooperation between the military and the ‍private sector. Private participation remains limited due to ⁤entry ‌barriers, including complex licensing,⁢ strict ​secrecy rules, and weak⁣ intellectual property protection. By 2019,only about 2,000 civilian firms ⁤were approved as defense suppliers – ​a small fraction⁢ of ​China’s industrial base. Many so-called private firms are, in practice,⁢ subsidiaries of state-owned conglomerates, blurring ownership and creating security risks. In 2024,⁤ China Far East International tendering co., marketed as a civilian contractor but a subsidiary of China Electronics ⁣Technology Group Corporation, was implicated in a classified data leak while serving ‌as a procurement​ agent for‍ a unit of the former PLA Strategic Support Force.

Weak Oversight Mechanisms

China’s oversight mechanisms remain too weak and opaque to enforce accountability. Even after the ⁣2016 reforms, service-specific equipment departments struggle to ‍monitor procurement effectively without self-reliant legislative oversight. Despite new guidelines and anti-corruption initiatives, the Central Military Commission continues⁤ to flag cases of officials skirting ‍regulations. Transparency remains limited, especially for major weapons contracts, and procurement⁢ timelines are rarely published. The core problem isn’t a‌ lack of rules, but​ a lack ‌of external checks to enforce them. The 2020 Global Defense Integrity Index ranked China’s procurement ⁢score at 24, placing it ‌in the “critical risk” category.

These shortcomings reflect deeper capacity‍ gaps. the‍ shift towards civilianizing Military Representative Offices, while easing pressure on active-duty officers, introduced‌ new risks.Many recruits lack understanding‌ of military protocols and security procedures, requiring meaningful ‌retraining.

These challenges reveal a paradox: the ‍CCP’s controlling approach generates the inefficiencies it ‌aims to eliminate. Xi’s anti-corruption campaigns ⁣consolidate political authority but stifle the risk-taking and professional autonomy essential for a modern, innovative military. ‌The “promise and peril” of ⁣China’s military modernization lies in this contradiction – ⁣an effort to fuse innovation with⁢ obedience that​ may‍ achieve neither.

furthermore,China faces growing external constraints on its military-civil fusion efforts. ‌Tightened export controls, expanded investment ​screening, and ⁤increased ⁤scrutiny of academic and commercial‍ partnerships by the United states, Japan, the Netherlands, Germany, and the United kingdom⁤ are restricting access to dual-use and frontier​ technologies. Numerous military-civil fusion entities have been sanctioned under the Department of Defense’s Section 1237 authority.

Looking Ahead

As China’s economic growth slows,frictions between maintaining rigid control and achieving operational efficiency will intensify. Beijing faces a mounting challenge of affording the mechanisms it deems⁣ essential for⁤ its defense policy. The success of the ‍15th Five-Year Plan hinges on Beijing’s ability to balance strategic insulation with global integration.

Key developments to watch include the evolution​ of legal frameworks, the scope of private-sector participation, and how Beijing⁣ navigates intensifying external constraints. Meaningful reform requires loosening the​ CCP’s ⁢administrative grip,fostering genuine competition,and adapting to a changing geopolitical landscape. ⁤Whether Beijing can deliver genuine reform or simply repackage existing hierarchies remains to be seen.

Jessica C. Liao is an associate professor of‍ asian Studies in the Department of National Security and Strategy at the U.S. Army War College. Previously, she ​was an associate⁣ professor of political science ‍at the School of Public and International Affairs at North Carolina State ⁢University.⁣ She also served as the 2020-2021 Wilson China Fellow. In 2022, she served as an economic development specialist at the U.S. Embassy in‌ Beijing, were she focused on China’s external engagement with Belt and road Initiative countries.

Joshua Arostegui is⁢ the chair ​of China Studies and research director ⁤of ‌the China Landpower Studies Center at the U.S. Army War College Strategic Studies Institute. His primary research ⁣topics include Chinese strategic landpower, People’s Liberation Army​ joint operations, and Indo-Pacific security affairs. ‍He previously served as⁤ a senior intelligence analyst at the U.S. Army’s National Ground Intelligence Center.

disclaimer: The authors’ views ⁢expressed here are personal and do not reflect the⁣ official⁢ policy or position of the Department of the‌ Army or any U.S. government entity.

Image: China News Service via Wikimedia Commons