The NORINCO Group is one of China's ten defense-industrial enterprises (jungong qiye) which report to the State Council. It does not have any formal ties to the PLA, although NORINCO is an important military supplier. NORINCO was created in the early 1980's as the export arm of the Fifth Ministry of Machine Industry (5MMI). In 1982, 5MMI was renamed the Ministry of Ordnance Industry. NORINCO was "corporatized" in 1988 as the China Ordnance Industry Corporation (COIC), but due to name recognition issues, the name NORINCO remained in use (or alternatively, the NORINCO Group).

NORINCO develops, produces, and markets a variety of military equipment, systems, and components, including fire control systems, sighting and aiming systems, and NBC protection equipment.

The reorganization of state owned enterprises (SOEs) after the ninth meeting of the National People's Congress restructured much of China's defense industrial complex. As part of the reorganization, in 1998 and 1999 COIC was divided into two entities, the China Ordnance Industry Group Company and the China Ordnance Equipment Industry Group Company. However, NORINCO remained one of the export arms of the two new entities. NORINCO remains one of the leading import/export companies in China's defense industry.

According to official company information NORINCO is a large transnational corporation specializing in a combination of technology, manufacture and trade. The company deals with: imports, exports and some domestic trade; supplying goods, materials and large complete sets of equipment; contracting for engineering projects; export of labor services; processing with materials and assembling parts; and compensation trade as well as industrial investment.

The company's website notes that NORINCO's Main products include:

• Vehicles and mechanical products,
• Optical-electronic products,
• Explosives and blast materials,
• Civil firearms and ammunition,
• Light industrial products,
• "Special products",
• Fire-fighting equipment,
• Building materials,
• Metal and non-metal materials and their finished products
• Precision strike systems,
• Amphibious assault weapons and equipment,
• Long-range suppression weapon systems,
• Anti-aircraft & anti-missile systems,
• Information & night vision products,
• High-effect destruction systems,
• Anti-terrorism & anti-riot products, and
• Small arms

Most of these products are actually produced by other companies but exported by NORINCO.

Sanctions

Between 2002 and 2007 NORINCO was sanction a total of seven times the sanctions were based on the Iran Nonproliferation Act of 2000 or its successor the Iran Syria Nonproliferation Act of 2005. Other occasions the sanctions were based on executive orders which imposed tougher penalties. For instance, in May 2003, the U.S. government imposed sanctions on NORINCO for allegedly supplying missile technology to Iran; these sanctions were based on Executive Orders 12938 and 13094. The sanctions barred all exports to the United States by NORINCO or its subsidiaries, and forbade any contracts between the company and U.S. government agencies. The sanctions were put into effect to block imports of NORINCO products, ending a trade relationship that had reached the annual amount of US$100 million in 2002. In June 2003, NORINCO was sanctioned again by the U.S. government for transferring sensitive technology to Iran that could be used in a WMD program. NORINCO was sanctioned yet again in September 2003 for transferring missile technology to Iran.

Recent Developments

The group is involved in other business including exhibition and advertising, audio, video and publishing services, information consultation, real estate development, storage and transportation, finance, hotel and travel services. In 2008 NORINCO gross volume of business reached RMB 145 billion, and import export volume totaled US$ 2.56 billion with total profits of RMB 4.5 billion. NORINCO has 82 overseas companies and offices, and 23 domestic subsidiaries.

NORINCO is a major exporter of small arms. In March 2000, NORINCO sold US $65.9 million in arms to the Zimbabwe government. The types of arms that were transferred included rocket anti-personnel shells, grenades for assault rifles, and hand grenades. Tanks and tank ammunition may also have been included in the sale.

After the 2003 sanctions, NORINCO's leadership took a proactive approach in its response to U.S. concerns and began to develop an internal compliance program (ICP) for its exports. NORINCO began developing the internal framework to address proliferation concerns and by 2006 the company fully launched its ICP. The U.S. government recognized NORINCO's progress in this issue and in 2007 it waived the remaining sanctions.

NORINCO has strong presence in Africa and recently participated in the Africa Aerospace and Defence Exhibition in South Africa in September. NORINCO exhibited HJ-8 anti-tank missile, five models of the MBT-2000 main battle tank, the WMZ551 wheeled infantry fighting vehicle, LD2000 air defense weapon and drawing boards of the PLZ45-155 self-propelled artillery systems and the long-range AR2 300mm multiple-launch rocket system (MLRS). Zambia has expressed an interest in upgrading their T-59D tank engines, armor and fire control systems.

In 2006 NORINCO released the LD2000 air defense system capable of countering air launched missiles, cruise missiles and unmanned aerial vehicles. This has multiple target engagement capability, and able to operate in electronic counter measure environment.

The Pakistanis have developed the Baktar Shikan antitank missile which is licensed copy of the NORINCO Red Arrow-8. Recently, NORICO developed the Red Arrow-10 anti tank guided weapon system. The Red Arrow series has also been exported to Malaysia, and Bangladesh. Peru has purchased NORINCO industries HJ-73C anti-tank guided weapons, but larger defense acquisitions from Peru have not materialized.

NORINCO releases the AR2 300mm rocket launched system sources have stated that Pakistan has ordered a regiment to counter Indian Army deployment.

Sources:
[1] Yan Kong, "China's Arms Trade Bureaucracy," Jane's Intelligence Review, February 1994, p. 81; Richard W. Fieldhouse, Chinese Nuclear Weapons, p. 42;
[2] Hua Di, "China's Arms Proliferation Perspective: Prospects For Change Due To Economic Reforms;" in W. Thomas Wander and Eric H. Arnett, eds., The Proliferation of Advanced Weaponry: Technology, Motivations, and Responses, 1992, p. 126;
[3] Elizabeth D. Olmo, "China's Nuclear Agenda and the Implications for United States Foreign Policy," Naval Postgraduate School, Monterey, California, September 1993, p. 83;
[4] Defense Exports--Current Concerns, Edition No. 1, April 1993, pp. 4-12.
[5] "China's International Defense-Industrial Organizations Organizational Chart," Defense Intelligence Agency, Defense Intelligence Reference Document DI-1921-60-98, 15 June 1998.
[6] Wendell Minnick, "China Comes to Africa," Defense News, 9 February 2009, in Defense News, www.defensenews.com.
[7] James Murphy, "US imposes sanctions on companies alleged to have sold military equipment to Iran," Janes Defense Industry, 29 December 2005, in Janes defense, www.janes.com;
[8] "Norinco Company info," NORINCO, 2009, in NORINCO, www.norinco.com.cn;
[9] Christopher Foss, "China Reveals LD2000 details," 12 July 2006, Janes Defense Weekly, in Janes Defense, www.janes.com;
[10] Farhan Bokhari, "Pakistan Targets Exports Market for Low Cost Missiles," 23 November 2006, Janes Defense Industry, in Janes defense, www.janes.com;
[11] Inigo Guevara, "China seeks stronger ties with South American armed forces," Janes Defense Weekly, 22 November 2007, in Janes defense, www.janes.com;
[12] Christopher Foss, "NORINCO Markets AR2 Multiple Launch Rocket System," Janes Missiles and Rockets, 30 January 2009, in Janes Defense, www.janes.com;
[13] Christopher Foss, "NORINCO brings Red Arrow 10 ATGW system to market," Janes Missiles and Rockets, 31 July 2009, in Janes Defense, www.janes.com;
[14] "ATGWs Still Hit The Spot: Anti Tank Guided Weapons," Janes Defense Weekly, 7 September 2009, in Janes Defense, www.janes.com.