China possesses a comprehensive nuclear infrastructure for both military and civilian purposes, including enrichment and reprocessing capabilities. China initially constructed its military nuclear facilities with Soviet assistance, but after that state’s withdrawal, completed them independently. In the late 1960s China constructed numerous military nuclear facilities as a part of its “Third Line” policy of duplicating essential military infrastructure. Beginning in the late 1980s, China initiated a policy of “military to civilian” conversion of industries, including nuclear energy, and has established many nuclear corporations for civilian nuclear energy programs. China currently has 16 nuclear power reactors in operation and 26 under construction, in addition to 17 operational research reactors.[1]

Relevant Individuals and Institutions

The Chairman of the Central Military Commission (CMC) is the ultimate authority with regards to China's nuclear weapons, and the management of relevant facilities.[2] The CMC has delegated authority over the Chinese military’s nuclear facilities to the General Armaments Department (GAD) under the People’s Liberation Army, which oversees the China Academy of Engineering Physics (CAEP). CAEP is responsible for most of the research, development, testing and production of China’s nuclear weapons.[3]

China’s civilian nuclear energy policy is opaque and lacks a centralized government agency. This ambiguity is rooted in the transition from military to civilian programs, as well as constant economic and institutional reforms.[4] Originally the Second Ministry of Machine-Building headed the nuclear industry, with a primary focus on developing China’s first nuclear weapons.[5] In 1982 this ministry was renamed the Ministry of Nuclear Industry (MNI), arguably to reflect increased efforts in the civilian nuclear program.[6] In 1988 the People’s Congress dissolved the MNI and created the Chinese National Nuclear Corporation (CNNC), which controls most nuclear sector business, including research and development, design, uranium exploration and mining, enrichment, fuel fabrication, reprocessing and waste disposal.[7]

Though opaque and constantly changing, it appears that the China Atomic Energy Authority (CAEA), under the Ministry of Industry and Information Technology (MIIT) has most regulatory authority, and the National Nuclear Safety Association (NNSA) issues licenses and grants technical approvals.[8]

Funding for Nuclear Programs

Initially, China’s crash program for military nuclear capability relied on exchanges with the Soviet Union and a drastic increase in domestic expenditures. In exchange for Soviet assistance, China provided “necessary raw materials” for Soviet strategic programs, and sold surplus mined uranium. The PRC simultaneously increased funds for science from $15 million in 1955 to $100 million in 1956, and the Chinese Academy of Sciences received three times more funding in 1957 than in 1953.[9]

During the “Third Line Policy” of duplicating critical infrastructure, one fifth of expenditures, or 28 billion Yuan (1965-1980) went to defense purposes.[10] This budget included nuclear facilities constructed in Sichuan Province, such as the Heping Uranium Enrichment Plant, the Yibin Nuclear Fuel Component Plant, and the Guangyuan Facility (Plant 821).

In 1988 China established the China National Nuclear Corporation (CNNC) — a corporate entity — as part of a broader effort to decrease the nuclear industry’s dependency on the government for financial support.[11] Even after corporatization of nuclear energy began, CNNC was seen as a part of the military-defense industry, and nuclear power was not a profitable venture until 2003.[12]

From 2003 to present there has been a surge in demand for nuclear power reactors, making nuclear energy more profitable and open to joint ventures. Currently China has 16 nuclear reactors in operation and 26under construction.[13] Nuclear power plants have become a large sources of revenue for local governments, further stimulating demand. The unfinished Taohuajiang nuclear power plant in Hunan Province is expected to bring at least 2 billion RMB in annual tax revenue to the local county, five times the total collected in 2010.[14] After the Fukushima crisis in Japan, Chinese Premier Wen Jiabao announced a moratorium on the construction of planned nuclear reactors.[15] However, the moratorium is expected to be lifted sometime in the second half of 2012.[16]

China’s Past, Present and Planned Nuclear Facilities

Soviet assistance was critical in the early stages of China’s nuclear facility construction. Between 1955 and 1958 the two nations signed six accords on the development of China’s nuclear science, industry, and weapons program. In these accords, Soviet assistance included the supply of a nuclear reactor, cyclotron, aid in building China’s nuclear industries and research facilities, and a prototype atomic bomb.[17] The Sino-Soviet Split prevented the transfer of a prototype weapon, and the Chinese had to independently finish the construction of the gaseous diffusion plant at Lanzhou, Jiuquan's plutonium-producing reactor and plutonium-processing plant, and the Baotou Nuclear Fuel Component Plant.[18] China duplicated these facilities in its Third Line Policy with the construction of the Heping Uranium Enrichment Plant, Guangyuan facility (Plant 821), and the Yibin Nuclear Fuel Factory.

Highly enriched uranium (HEU) production was based primarily in the Lanzhou and Heping gaseous diffusion plants. Both facilities stopped HEU production in 1979 and 1987 respectively. China’s current inventory of HEU for weapons is estimated to total 16 ± 4 tons.[19] China has produced plutonium for weapons at two sites, the Jiuquan Atomic Energy Complex and Guangyuan plutonium production complex. China’s current inventory of weapon-grade plutonium is estimated to total 1.8 ± 0.5 tons.[20] Many HEU research reactors in China are being converted to low enriched uranium (LEU) or shut down. In 2007 the Nuclear Power Institute of China converted its high flux engineering test reactor (HFETR) as well as the HFETR Critical Assembly from HEU to LEU. China shut down the MNSR-SH at the Shanghai Testing and Research Institute in March 2007, and confirmed the shutdown of the MNSR-Shandong reactor in December 2010.[21]

For its civilian nuclear sector China is actively indigenizing foreign technology and investing heavily in new technologies. The State Nuclear Power Technology Corporation (SNPTC), directly under the State Council, managed foreign bidding processes for new nuclear power plants to be deployed SNPTC  selected the Westinghouse AP1000, a Generation III technology reactor. In exchange, Westinghouse is assisting in the development of Chinese designs, and eventually may transfer intellectual property rights.[22] Independently China is investing in the development of Generation IV technologies, such as the pebble-bed high temperature gas-cooled reactor (HTGR).[23]

China is exploring options for reprocessing spent nuclear fuel to close the fuel cycle, in particular at the 404 Reprocessing Plant in Gansu Province. On 3 January 2011, state media hailed a “breakthrough” of mastering reprocessing technology.[24] The process poses proliferation concerns of plutonium being extracted, and cost and feasibility problems may hinder the commercialization of reprocessing technology.[25]

Sources:
[1] “Nuclear Power in China,” World Nuclear Association, April 2012, www.world-nuclear.org; “Research Reactor Database (RRDB),” IAEA, http://nucleus.iaea.org/RRDB.
[2] Stephan Polk, "China's Nuclear Command and Control," Air Power Journal, Vol. 2 No. 4, Winter 2005, p.11, www.aerospaceindia.org.
[3] “Nuclear R&D Organizations in Nine Nations,” Congressional Research Service, 28 February 2011, p. 3.
[4] Xu Yi-chong, The Politics of Nuclear Energy in China (New York: Palgrave Macmillan, 2010), p. 68.
[5] John W. Lewis and Xue Litai, China Builds the Bomb (Stanford: Stanford University Press, 1988), pp. 54-59.
[6] Xu Yi-chong, The Politics of Nuclear Energy in China (New York: Palgrave Macmillan, 2010), p. 68.
[7] “集团介绍 [Introduction to the Corporation],” China National Nuclear Corporation, www.cnnc.com.cn; “Government Structure and Ownership, Nuclear Power in China Appendix 1,” World Nuclear Association, July 2011, www.world-nuclear.org.
[8] Xu Yi-chong, The Politics of Nuclear Energy in China (New York: Palgrave Macmillan, 2010), p. 91.
[9] John W. Lewis and Xue Litai, China Builds the Bomb (Stanford: Stanford University Press, 1988), pp. 41-43.
[10] John W. Lewis and Xue Litai, China’s Seapower: The Politics of Force Modernization in the Nuclear Age (Stanford: Stanford University Press, 1994), pp. 91-94.
[11] Evan Medeiros, Reluctant Restraint: The Evolution of China’s Nonproliferation Policies and Practices, 1980-2004 (Stanford: Stanford University Press, 2007), p. 76.
[12] Xu Yi-chong, The Politics of Nuclear Energy in China (New York: Palgrave Macmillan, 2010), p. 75.
[13] “Nuclear Power in China,” World Nuclear Association, April 2012, www.world-nuclear.org.
[14] Liu Linlin, “China Set to Power on with Massive Nuclear Plants,” People’s Daily Online, 31 March 2011, http://english.peopledaily.com.cn.
[15] “国务院：全面检查核电站不符安全标准立即停建 [State Council: Comprehensive Inspection of Nuclear Power Plants, Those Inconsistent with Safety Standards Will Immediately Be Shut Down],” Nanfang Daily (China), 16 March 2011, www.infzm.com.
[16] Shi Jiangtao, “Nuclear Band to End Soon,” The South China Morning Posts, 11 March 2012, www.scmp.com
[17] John W. Lewis and Xue Litai, China Builds the Bomb (Stanford: Stanford University Press, 1988), p. 41.
[18] John W. Lewis and Xue Litai, China Builds the Bomb (Stanford: Stanford University Press, 1988), p. 97-98, 107.
[19] “Global Fissile Material Report 2011: Nuclear Weapon and Fissile Material Stockpiles and Production,” International Panel on Fissile Materials, 2012, www.fissilematerials.org, p.10, 18.
[20] “Global Fissile Material Report 2011: Nuclear Weapon and Fissile Material Stockpiles and Production,” International Panel on Fissile Materials, 2012, www.fissilematerials.org, p.10, 18.
[21] "GTRI: Reducing Nuclear Threats," National Nuclear Security Administration, 1 February 2011, http://nnsa.energy.gov.
[22] “Nuclear Power in China,” World Nuclear Association, 22 September 2011, www.world-nuclear.org.
[23] Keith Bradsher, “A Radical Kind of Reactor,” The New York Times, 24 March 2011, www.nytimes.com.
[24] “24年科技攻关 [24 Year Technological Breakthrough],” CCTV, 3 January 2011, via: www.youtube.com.
[25] Mark Hibbs, “China Peeps About Plutonium,” Arms Control Wonk, 11 January 2011, http://hibbs.armscontrolwonk.com; Frank Von Hippel, “Plutonium, Nonproliferation, and Radioactive Waste Politics in East Asia,” presentation for the Carnegie-Tsinghua Center for Global Policy, Beijing, China, 1 November 2010, http://carnegieendowment.org.

China began pursuing ballistic missile capability in the 1950s, and Beijing has devoted many resources to the effort, making it one of the “pockets of excellence” within the defense industry.[1] Today, China continues to advance its missile capabilities, and it has a fully established infrastructure for ballistic missile research and development, production, testing, export, and deployment. Missiles are developed and deployed at sites across the country, but the overall direction of the program is controlled by the central leadership through a hierarchical organizational structure.

Relevant Individuals and Institutions

The Central Military Commission (CMC) is the highest military organ within both the state and the Communist Party in China.[2] Headed by a chairman who is simultaneously the President of the People’s Republic of China and the General Secretary of the Communist Party of China, the CMC retains ultimate control of the country’s military strategy and doctrine, including nuclear posture.

Under the “direct command and control of the CMC,” China’s nuclear and conventional ballistic missile forces are controlled by the Second Artillery Force (SAF), an independent arm of the People’s Liberation Army (PLA).[3] At the operational level, the SAF missile forces are organized hierarchically into a national headquarters, missile bases, missile brigades, and launch battalions.[4] The PLA also manages the military and civilian manned space programs, while “unmanned scientific projects and international collaboration” are directed by the China National Space Administration (CNSA).[5]

China’s ballistic missile program also depends on a large support infrastructure charged with research and development, production, and testing new types of missile systems. Control over the direction of this effort has been reorganized and restructured a number of times throughout the history of the program.[6] Currently, the General Armaments Department (GAD) of the PLA is responsible for “managing the life cycle of the PLA’s weapon systems (from R&D to retirement) and running China’s testing, evaluation, and training bases.”[7] The GAD decides the PLA’s equipment acquisition priorities and controls funding for procurement, but the military is not directly in charge of the individual production units.

Instead, procurement is allocated on a competitive basis from the civilian defense industrial complex, regulated by the State Administration for Science, Technology and Industry for National Defense (SASTIND).[8]  For missiles, the development is carried out under the umbrella of two large state-owned enterprises: the China Aerospace Science and Technology Corporation (CASC) and the China Aerospace Science and Industry Corporation (CASIC), although certain systems are developed by other large corporations such as Aviation Industry Corporation of China (AVIC), and China North Industries Corporation (NORINCO).[9] These industries also develop technology for China’s civilian space efforts.

Funding

The funding of China’s missile programs is difficult to discern from open source information. For the 2009 fiscal year, China reported a total defense expenditure of 495.11 billion RMB, or roughly 78 billion USD.[10] Around one-third of this cost was spent on equipment, including “research and development, procurement, maintenance, transportation and storage of weaponry and equipment,” totaling 159 billion RMB, or 25 billion USD.[11] However, the U.S. Department of Defense, citing lack of transparency, estimates total Chinese military expenditures for the same period to be over 150 billion USD.[12]

As part of the military-to-civilian shift in China’s defense industrial complex organization in the 1980s and 1990s, the missile industry lost its “early status as a top government resource priority,” and instead turned to missile sales and commercial space lift transactions to generate revenue.[13] Estimates of China’s overall spending on space programs, including dual-use technologies, range from 1.4-2.2 billion USD.[14] The large state-owned enterprises in charge of China’s missile and civilian space industry can also serve as indicators of the resources devoted to these projects. CASC has revenue of 70 billion RMB and assets of over 150 billion RMB, while CASIC has assets totaling 100 billion RMB.[15]

Past, Present and Planned Facilities

China’s initial development of missile technology and capabilities was driven by military needs and organized accordingly. Priorities were dictated from the top in a hierarchical structure, but deployment and production were spread to bases and facilities around the country. Each of China’s six regional missile bases is in command of a number of brigades, each of which is in charge of deploying a certain type of missile depending on the brigade’s location and potential target, as shown in Table 1.[16]

The research and development, testing and production facilities have undergone numerous name changes and bureaucratic restructurings over the history of China’s missile program. Some facilities have existed since the very start of the missile program in the 1950s; others were constructed in the late 1960s as “third-line” facilities in more remote inland locations in order to protect them from attack; still others were created more recently to adapt to new requirements such as civilian space technology.

Currently, under the broad umbrellas of CASC and CASIC, there are a number of academies that usually cover a general type of technology, under which numerous design departments, research institutes, and factories focus on specific components or systems.[17] For example, the CASC First Academy was established in 1957 and is primarily responsible for China’s liquid-fueled ballistic ICBMS and solid-fueled DF-15, DF-31, and DF-31A; its current name is the China Academy of Launch Technology (CALT), and it also plays a strong role in the manned space program.[18]  The CASC Sixth Academy was a third-line facility built near Xi’an, Shaanxi Province, and develops liquid-fueled propulsion systems.[19] CASIC’s Fourth Academy, established in 2002, deals with systems integration for medium range ballistic missiles and solid-fueled launch vehicles.[20]

Sources:
[1] James Mulvenon and Rebecca Samm Tyroler-Cooper, “China’s Defense Industry on the Path of Reform,” US-China Economic and Security Review Commission, October 2009, www.uscc.gov.
[2] "The Central Military Commission,” The Central People’s Government of the People’s Republic of China, www.gov.cn; “Central Military Commission of the Chinese Communist Party,” ChinaToday, www.chinatoday.com.
[3] “The Second Artillery Force of the PLA,” Ministry of National Defense, the People’s Republic of China, http://eng.mod.gov.cn; also referred to as 第二炮兵, Second Artillery Corps, Second Artillery, and Strategic Rocket Forces.
[4] “The Second Artillery Force of the PLA,” Ministry of National Defense, the People’s Republic of China, http://eng.mod.gov.cn.
[5] Jeffrey Logan, “China’s Space Program: Options for U.S.-China Cooperation,” CRS Report RS22777, 21 May 2008, www.au.af.mil.
[6] Yan Kong and Tim McCArthy, “China’s Missile Bureaucracy,” Jane’s Intelligence Review, 1 January 1993.
[7] Evan S. Medeiros et al., A New Direction for China’s Defense Industry (Santa Monica: RAND, 2005), www.rand.org, p. 35.
[8] The COSTIND was previously a semi-military agency, but was fully placed under civilian administration in the 1998 reorganization; it was renamed the SASTIND and put under the Ministry of Industry and Information Technology (MIIT) in 2008. See Evan S. Medeiros et al., A New Direction for China’s Defense Industry (Santa Monica: RAND, 2005), www.rand.org; and “State Administration of Science, Technology, and Industry for National Defence,” SinoDefence, 6 September 2011, www.sinodefence.com.
[9] Evan S. Medeiros et al., A New Direction for China’s Defense Industry (Santa Monica: RAND, 2005), www.rand.org; “Defence,” 北方工业 NORINCO, 2005, www.norinco.com; “Brief Introduction of AVIC,” Aviation Industry Corporation of China, 2008, www.avic.com.cn.
[10] Information Office, State Council of the People's Republic of China, "China's National Defense in 2010," Editor Wang Guanqun, March 2011, www.xinhuanet.com.
[11] “China,” Instrument for Standardized Reporting of Military Expenditures, 30 August 2010, http://unhq-appspub-01.un.org.
[12] U.S. Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China,” 2010, www.defense.gov.
[13] James Mulvenon and Rebecca Samm Tyroler-Cooper, “China’s Defense Industry on the Path of Reform,” US-China Economic and Security Review Commission, October 2009, www.uscc.gov.
[14] Jeffrey Logan, “China’s Space Program: Options for U.S.-China Cooperation,” CRS Report RS22777, 21 May 2008, www.au.af.mil.
[15] “Company Profile,” China Aerospace Science and Technology Corporation (CASC), www.spacechina.com; “集团简介[Group Overview],” China Aerospace Science & Industry Corp., 2008, www.casic.com.cn.
[16] Bates Gill, James Mulvenon, and Mark Stokes, “The Chinese Second Artillery Corps: Transition to Credible Deterrence,” The People’s Liberation Army as Organization, ed. James C. Mulvenon and Andrew N.D. Yang (Santa Monica: RAND, 2002), www.rand.org; Sean O’Connor, “PLA Second Artillery Corps,” Air Power Australia, 2009, www.ausairpower.net.
[17] Mark Stokes, “China’s Evolving Conventional Strategic Strike Capability,” Project 2049 Institute, 14 September 2009, http://project2049.net.
[18] Mark Stokes, “China’s Evolving Conventional Strategic Strike Capability,” Project 2049 Institute, 14 September 2009, http://project2049.net; “Outline of CALT,” China Academy of Launch Vehicle Technology, www.calt.com.
[19] “历史沿革 [Historic Evolution],” Academy of Aerospace Propulsion Technology, www.aalpt.com.
[20] Mark Stokes, “China’s Evolving Conventional Strategic Strike Capability,” Project 2049 Institute, 14 September 2009, http://project2049.net.