In January 2017, Xi Jinping established the Central Commission for Integrated Military and Civilian Development, a high-level body to oversee the implementation of military-civil fusion. Several months later, in March 2017, the Equipment Development Department of the CMC released nearly 3,000 patents related to defense technology to the public, marking the first time the PLA has declassified defense patents.
Taken together, these developments have amounted to a significant shift in how China’s state-owned defense sector and People’s Liberation Army (PLA) interact with the private economy. Nowhere has that shift been more pronounced than in China’s fledgling private space industry. In 2014, the State Council announced that it would allow private capital and enterprises to enter the previously closed off sector.
… a LandSpace representative told a Quartz reporter that the company was utilizing designs from a flight-proven rocket, possibly the Long-March 11. Analysts have suggested that OneSpace’s OS-M rockets may use propulsion technology from retired PLA missiles. One employee at I-Space described the benefits of “spin-off” technology as like “standing on the shoulders of a giant.”
That was Lorand Laskai in a statement before the US-China Economic and Security Review Commission (April 25, 2019), “Hearing on China in Space: A Strategic Competition.” Those companies, LandSpace, OneSpace, and I-Space, are new Chinese firms.
I think the advantages of spillovers are particularly important in the areas of high technology. The Chinese government seems to understand that releasing a great deal of information to its own citizens will help stimulate innovation. It is actually the same as what Admiral Rickover did with nuclear reactor technology in the 1950s, first compiling the best available knowledge and releasing it in several volumes over the next couple decades.
Indeed, as I learned from Engineering the F-4 Phantom II, the US aviation industry had a patent pool, allowing all participants access to each other’s patents. It helped spur innovation because everyone was learning from each other’s experiences. It wasn’t clear, however, when the patent pool disintegrated.
If the DOD wants new firms to participate in a meaningful way, information about requirements and technologies needs to be released more readily. (The Chinese seem to have easy enough access to it already…) Markets can be thought of as a mechanism for spreading local information, connecting separate organizations through mutually beneficial exchange.
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