I GCC Project on the Study of Innovation and Technology in China
June 30, 2016
In This Issue

Welcome to the third issue of China D-Tech Watch, which is produced by the Study of Innovation and Technology of China project at the University of California Institute on Global Conflict and Cooperation. This is a bi-monthly digest of important reporting on Chinese defense and civil-military science, technology, and industrial matters. An extensive range of Chinese and English language news publications, specialized journals, and official and independent websites are covered. Each issue will have a short analysis of a topical subject matter.

Tai Ming Cheung

Comments can be sent to Eric Anderson, Research Analyst, at  eanderson@ucsd.edu. 
SITC News Team
UC Institute on Global Conflict and Cooperation
Analysis by the SITC Team: 
The aero-engine industry, often used to gauge a country's manufacturing level, has been the "Achilles' tendon" of China's defense industry for decades. Indeed, China's current defense industry lacks the ability to develop or produce state-of-the-art military and civilian aero-engines. Insufficient research and development (R&D) funding and the China's current aircraft development system are the two primary constraints to China's aero-engine industry. Under the current development system, the development of a new type of aero-engine can only be initiated with the development of new aircraft. However, as the development cycle of aero-engines within China is longer than that of the aircraft, engine development always lags behind the development of aircraft. It is also heavily affected if R&D funding for aircraft development is blocked. 
NDRC, MIIT and National Energy Administration jointly issued the "Made in China 2025 Energy Equipment Implementation Plan" on June 12. In the plan, China states its intent to build an internationally competitive energy equipment system by 2025. 
6 12 日,国家发改委、工业和信息化部与国家能源局联合发布《中国制造 2025 -能源装备实施方案》(以下简称《实施方案》)。《实施方案》提出,到 2025 年前,我国将形成具有国际竞争力的较完善能源装备产业体系,引领装备制造业转型升级。

U.S. and China held the seventh innovation dialogue in Beijing on June 5, 2016. Wan Gang, minister of Science and Technology and Dr. John Holdren, director of White House Office of Science and Technology Policy, co-chaired the meeting.
2016 6 5 日,第七次中美创新对话在北京举行。科技部部长万钢与美国总统科技助理、白宫科技政策办公室主任约翰·霍尔德伦博士共同主持会议,来自两国政府相关部门、产业界和学术界代表与会发言。

SASTIND held a civil-military integration forum in Beijing on June 7, 2016. The goal of the forum is to discuss measures to promote participation of private enterprises in research, development and maintenance of weapon and equipment.
2016 6 7 日,国防科工局在京召开国防科技工业军民融合座谈会,围绕贯彻落实中央有关军民融合决策部署,引导鼓励优势民口民营单位进入武器装备科研生产和维修领域进行研讨交流。国防科工局副局长徐占斌主持会议并讲话。

The China Aerospace Science and Technology Corporation recently established a space patent fund with registered capital of 500 million to 1 billion yuan. This fund will mainly be used to make investment in space related industries, including information technology, advanced equipment manufacturing, new energy and new materials.
近日,中国航天科技集团公司通过航天投资控股有限公司 ( 简称航天投资 ) 设立航天专利基金,成为首家设立专利基金的中央企业。该基金由航天投资作为主发起人,联合北汽集团产业投资有限公司、北京亦庄国际投资发展有限公司及航投高新 ( 苏州 ) 创业投资管理有限公司,同时引入科技部、财政部国家科技成果转化引导基金,北京经济技术开发区科技引导基金共同发起设立,总规模 5-10 亿元,首期已募资 3.85 亿元。航天专利基金主要投资集团公司宇航等主业领域及电子信息、高端装备制造、新能源、新材料等符合航天技术应用的相关产业。
A Long March-3C carrier rocket carrying the 23rd satellite in the BeiDou Navigation Satellite System (BDS) lifted off from Xichang Satellite Launch Center, southwest China's Sichuan Province, June 12, 2016.
2016 6 12 23 30 分,我国在西昌卫星发射中心用长征三号丙运载火箭,成功发射了第二十三颗北斗导航卫星。
The Chinese government on Thursday released a white paper elaborating on the action plan for the BeiDou Navigation Satellite System (BDS), which has been independently developed and operated by China. China has formulated a three-step strategy for developing the BDS, according to the document released by the State Council Information Office. The aim is to complete the deployment of the 35 satellite constellation around 2020 to provide services to global users.
China plans to launch a data relay satellite into Halo orbit near the Lagrange point L2 of the Earth-moon system at the end of May or in early June 2018 and will send the Chang'e-4 probe to the dark side of the moon about half a year later to explore the South Pole-Aitken basin, said Liu Tongjie, deputy chief of China's lunar exploration program.
国家航天局探月与航天工程中心副主任刘彤杰介绍,中国计划于 2018 5 月底或 6 月初将嫦娥四号的中继卫星发射至地月拉格朗日 L2 点的 Halo 轨道上,并在约半年后发射嫦娥四号的着陆器和巡视器,对月球背面南极艾特肯盆地开展着陆巡视探测。
China's first high orbit remote sensing satellite, Gaofen-4, went into use after six months of in-orbit testing, the State Administration of Science, Technology and Industry for National Defense (SASTIND) announced Monday. Gaofen-4 is China's first geosynchronous orbit high-definition optical imaging satellite and the world's most sophisticated.
SASTIND organized a leading group meeting to hear the progress of Gaofen III satellite. As the meeting approved the release of Gaofen III satellite from the factory, Gaofen III satellite is now ready for launch.
6 13 日,国防科工局在京组织召开高分专项工程领导小组第七次会议,听取高分三号卫星任务各系统研制进展情况汇报,审议通过高分三号卫星、运载火箭出厂,转入发射实施阶段。高分专项工程领导小组组长、国防科工局局长许达哲强调,要做到四个到位,确保发射任务成功,早出应用成果。

China conducted the first flight of the new-generation Long March rocket on Saturday night, marking the first use of the Wenchang Satellite Launch Center in the island province of Hainan.
6 25 20 00 分,我国载人航天工程为发射货运飞船而全新研制的长征七号运载火箭,在海南文昌航天发射场点火升空,约 603 秒后,载荷组合体与火箭成功分离,进入近地点 200 千米、远地点 394 千米的椭圆轨道,长征七号运载火箭首次发射圆满成功。
China on Sunday recovered an experimental probe launched aboard a new generation rocket, marking another milestone in its increasingly ambitious space program that envisions a mission to Mars by the end of the decade. Space program authorities said the spaceship's landing on the vast Inner Mongolian steppe keeps China on schedule to place its second space station into orbit later this year. The launch of the spaceship aboard the newly developed Long March 7 rocket on Saturday was hailed as a breakthrough in the use of safer, more environmentally friendly fuels. The launch also marked the first use of the massive new Wenchang Satellite Launch Center on the southern island province of Hainan.
The State Council Information Office of the People's Republic of China published a white paper titled "China's Beidou Navigation Satellite System" on Thursday. Following is the full text of the white paper.
New photos show that China's gigantic five-hundred-meter Aperture Spherical Telescope (FAST) in Guizhou Province is structurally complete and ready to begin searching the skies for phenomena, including signs of extraterrestrial life. Construction of the 1.2 billion yuan (US$185m) radio telescope began in 2011 and is set to come online in September.

With a total registered capital of 50 billion yuan, Aircraft Engine Corp of China, the eleventh military industrial group of the country, was incorporated in Beijing on May 31, which indicates that the company has made its official debut since it initialized organization in October 2015.
SASAC made an announcement of the deputy leader of the Aircraft Engine Corp. of China. Luo Ronghuai, former deputy general manager of Commercial Aircraft Corporation of China Ltd, was appointed as deputy party secretary of the engine corporation.
6 7 日下午,国务院国资委宣布了关于中国航空发动机集团有限公司领导班子副职人选的决定:
A team in Nanjing University of Science and Technology has successfully developed the high-temperature single-crystal aluminum titanium PST new materials. This material can be used in the manufacturing of blade, a key component of aero-engine.
6 21 日从南京理工大学获悉,该校陈光教授团队研制出的高温 PST 钛铝单晶新材料,在新型航空航天材料钛铝合金方面,取得重大跨越性突破。航空发动机被誉为飞机的心脏,而叶片则是航空发动机中最关键的核心部件。
On Thursday, a woman named Wenxia Man was convicted in a Florida court of conspiring to evade U.S. export laws by illegally acquiring and sending fighter jet engines and drones to China, according to the U.S. Department of Justice. Prosecutors said Man was working with an associate in China to buy and export engines made by Pratt & Whitney and General Electric (GE), which are found in a range of top U.S. military aircraft, including the F-35 Joint Strike Fighter, the F-22 and the F-16 fighter jets. She was also found to have tried to export a General Atomics drone, and technical data for the different hardware items.
China's independently developed C919 large passenger jetliner will take its first flight later this year and complete follow-up technical verifications as early as 2017 before being delivered, Economic Information Daily reports on Tuesday. The success of the maiden flight indicates that the domestically produced large passenger aircraft C919 has achieved substantive results, which will not only further promote the rapid development of the country's large aircraft industry but also accelerate large domestic aircraft industry clusters to take shape.
日前从多个权威渠道获悉,我国自主研制的 C919 大型客机将于今年下半年首飞,最快 2017 年完成后续各项技术验证,并开始正式交付。一旦 C919 在年内完成首飞,就意味着我国 C919 大飞机工程将取得阶段性成果,这不但会进一步促进我国大飞机产业的快速发展,还将有助于国产大飞机产业集群的加速成型。
The Chinese military has a new warplane with an unusual purpose: to beam propaganda and disinformation into hostile territory. In that way, the new, four-engine Y-8GX7 psychological operations plane-also known by its Chinese name, Gaoxin-7-is analogous to the U.S. Air Force's EC-130J, which it says "conducts military information support operations and civil affairs broadcasts in F.M. radio, television and military communications bands
The official Xinhua News Agency reported that China has conducted live fire tests with two CH-4 UAVs.

Russia has informed China about the beginning of the development of a heavy aircraft engine with a thrust of 35 tons for the Sino-Russian long-range wide-body aircraft. Russian Deputy Prime Minister Dmitry Rogozin told reporters on Monday after a meeting of the Russian-Chinese intergovernmental commission on the preparation of regular meetings of the heads of government that this is the key point of the project for the development of a joint airliner.

State-owned China Shipbuilding Industry Corp or CSIC, the primary contractor for China's naval force, is transferring the assets of its subsidiary Qingdao Beihai Shipbuilding Heavy Industry Co to Wuchang Shipbuilding Industry Group Co, another of its subsidiaries, to enlarge the latter's capacity in building both military and commercial vessels. The Hubei-based Wuchang Shipbuilding is one of China's manufacturing bases to build conventional submarines and frigates, as well as maritime defense equipment and law-enforcement vessels.
In November 2012, then president Hu Jintao declared that China's objective was to become a strong or great maritime power. This report, based on papers written by China experts for this CNA project, explores that decision and the implications it has for the United States. It analyzes Chinese thinking on what a maritime power is, why Beijing wants to become a maritime power, what shortfalls it believes it must address in order to become a maritime power, and when it believes it will become a maritime power (as it defines the term). The report then explores the component pieces of China's maritime power-its navy, coast guard, maritime militia, merchant marine, and shipbuilding and fishing industries. It also addresses some policy options available to the U.S. government to prepare for-and, if deemed necessary, mitigate- the impact that China's becoming a maritime power would have for U.S. interests.
China's most advanced marine science ship Xiang Yang Hong 01 went into service in the eastern port city of Qingdao on Saturday.
我国最先进的全球级海洋综合科考船"向阳红 01 " 6 18 日在青岛交付给国家海洋局第一海洋研究所使用,同时列入国家海洋调查船队,将承担全球各大洋全水深的科考任务。

China State Shipbuilding Corporation has completed a deal with Wrtsil Group to purchase its 100% holding of WinGD. 
芬兰当地时间 6 20 日,瓦锡兰公司宣布,已经和中国船舶工业集团达成协议,将瓦锡兰公司持有的二冲程发动机合资公司温特图尔发动机有限公司 (WinGD) 的全部股份转让给中船集团。在这一交易完成后,中船集团持有 WinGD 公司 100% 的股份。
On June 18, an article on the website of the National Interest "The Ultimate Way to Sink an Aircraft Carrier" said that "...American and Japanese subs that will undoubtedly hound the Liaoning every time she leaves port, practicing to sink the carrier in the event of war."
The China State Shipbuilding Corporation (CSSC) has proposed the construction of a network of ship and subsurface sensors that could significantly erode the undersea warfare advantage held by US and Russian submarines and contribute greatly to future Chinese ability to control the South China Sea (SCS).

When receiving an interview at a program of China's CCTV, military expert Cao Weidong said that based on the construction progress reported by the media, China's second aircraft carrier may enter the water at the end of this year or early next year.

China has already begun to establish quantum communications networks in several cities, and is currently building a 1,000-kilometer quantum communications line connecting Beijing and Shanghai. A quantum communications satellite will launch in July.
State-backed Chinese technology group Tsinghua Holdings plans to spend $7.5 billion on research and development over the next five years, accelerating China's drive to build a high-value semiconductor industry to challenge global chipmaking rivals.

This week, China's Sunway TaihuLight officially became the fastest supercomputer in the world. The previous champ? Also from China. What used to be an arms race for supercomputing primacy among technological nations has turned into a blowout. The Sunway TaihuLight is indeed a monster: theoretical peak performance of 125 petaflops, 10,649,600 cores, and 1.31 petabytes of primary memory. That's not just "big." Former Indiana Pacers center Rik Smits is big. This is, like, mountain big. Jupiter big.
China has completed research and development of a new radar system, which can penetrate walls and provide scanning imagery of objects inside houses.

China Nuclear Engineering Corporation Limited listed on the Shanghai stock market on June 6, 2016. It is the first listed company affiliated to CNEC.
6 6 9 30 分,中国核工业建设集团公司总经理、中国核工业建设股份有限公司 ( 以下简称 " 中国核建 ") 董事长顾军与中国核建集团党组成员、中国核建总裁李定成在上交所共同敲响了披着红绸的铜锣,标志着 A 股市场第一家核电建设上市企业 -- 中国核工业建设股份有限公司成功挂牌上市,股票简称为 " 中国核建 " ,股票代码为 "601611" ,发行价格每股 3.47 元。开盘后瞬间,中国核建以 5.00 元, 44.09% 的涨幅无悬念实现秒涨停。
Global nuclear weapons in early 2016 saw a slight decrease from 2015, with China ranking fourth with 260 nuclear weapons, which is about 3.7 percent of that of the U.S., an annual nuclear forces data report said.

An advanced manufacturing fund was launched in Beijing Wednesday to facilitate the modernization of manufacturing. The fund, which was authorized by the State Council and initiated by the National Development and Reform Commission; Ministry of Finance; and Ministry of Industry and Information Technology; is a limited partnership and market-oriented institution, officials said at the founding ceremony.
The central government is concerned about losses of low-end manufacturers to other countries and so is giving them incentives to move to lower-cost parts of China. But at the same time, it wants to raise wages and spur consumer demand by developing more high-tech manufacturing, such as semiconductors and robotics.
The aero-engine industry, often used to gauge a country's manufacturing level, has been the "Achilles' tendon" of China's defense industry for decades. Indeed, China's current defense industry lacks the ability to develop or produce state-of-the-art military and civilian aero-engines. Insufficient research and development (R&D) funding and the China's current aircraft development system are the two primary constraints to China's aero-engine industry. Under the current development system, the development of a new type of aero-engine can only be initiated with the development of new aircraft. However, as the development cycle of aero-engines within China is longer than that of the aircraft, engine development always lags behind the development of aircraft. It is also heavily affected if R&D funding for aircraft development is blocked.
Many concerted attempts have been made to develop a Chinese domestic engine in the past, but it is only recently that the Chinese government has determined to concentrate investments to truly boost the domestic engine industry, thereby relieving the nation from its enduring pain in the "heart of airplane" and setting a new growth driver to offset downward economic pressure. A major step in this effort is the consolidation of aero-engine entities within the defense sector into a national engine corporation.
News about the establishment of a national engine corporation first appeared in October 2015. On October14, 2015, AVIC Aviation Engine Corporation Plc., AVIC Aero-Engine Controls Co., Ltd. and Sichuan Chengfa Aero Science & Technology Co., Ltd.--all three listed companies affiliated to Aviation Industry Corp. of China (AVIC)--made announcements claiming that restructuring and integration plans of AVIC aero-engine related enterprises and entities were being developed and that AVIC may be not be their de facto controller. According to Shanghai Securities News , a new corporation on the same level as AVIC would be established to represent the aero-engine sector.
Early this year, more details about this corporation was reported by Bloomberg . It said that China plans to merge more than 40 entities working on plane engines into a group holding 145 billion RMB ($22 billion) in assets, as part of a broader push into advanced industries to propel its economy. Under the plan, the entities have combined assets of about 110 billion RMB, and the Chinese government and companies including AVIC will invest an additional 35 billion RMB.
The Aircraft Engine Corp. of China, the country's eleventh defense conglomerate, made its official debut on May 31, 2016, when it was incorporated in Beijing with a total registered capital of 50 billion RMB ($7.62 billion). Unlike other state-owned enterprises with only one shareholder, the Aircraft Engine Corp. of China has four shareholders: The Commercial Aircraft Corporation of China Ltd., the Beijing State-owned Assets Operation & Management Center, the State-owned Assets Supervision and the Administration Commission, and AVIC. Its leadership is split between senior AVIC and China Aerospace & Science Industry Corp. (CASIC) managers. Cao Jianguo, the former general manager of CASIC has been appointed as chairman, and AVIC deputy general manager Li Fangyong has been appointed general manager of the new conglomerate.
It is unclear what the structure of this new conglomerate will be, since which entities will be incorporated has not been announced. However, the air power division in AVIC is widely believed to be a primary component of the new conglomerate. In addition, entities in basic engine manufacturing of CASIC and China Aerospace Science and Technology Corporation will also be merged. Chart 1 shows a tentative organization structure of the Aircraft Engine Corp. of China based on available information.
The establishment of Aircraft Engine Corp. of China shows China's resolve to support its domestic aircraft industry and overcome obstacles to create an indigenous aero-engine. Experts widely believe that a separated engine corporation is the best way to resolve issues within China's aircraft development system and guarantee efficient use of funding appropriated to engine development. The aero-engine is highly anticipated to help pioneer China's mid-and-long term development and technical innovation. Furthermore, the establishment of the eleventh conglomerate may indicate a new round of creation of functional monopolies in the defense sector. 

Chart 1. Tentative Organization Structure of Aircraft Engine Corp. of China