Is China's economic success likely to contribute to an arms build-up in China through the strengthening of China's own technology base and its local production? Is China likely to be able to mobilize resources quickly for production or for rapid technological advances in the event of a change in its security situation? The chapter concludes that the answer to both these questions is `no'.

China has in the past been able to marshall the resources for major projects (the development of nuclear weapons and delivery systems). There have been recent advances in managerial methods, less formalization, better communications and more openness, enhanced travel opportunities and greater mobility within the scientific labour force. China is particularly strong in the civilian software and information technology sectors, and there is at present a renewed appreciation of the importance of science and scientists for the advancement of the country. Nevertheless its access to imported technology is low--only Russian and Israeli military technology has been available since the Tiananmen Square incident. Its capacity to absorb technology is also limited. Most of the technology which China is now gaining as a result of economic success, for instance through joint ventures, concerns low-technology civilian and consumer goods. China's preferred method of acquiring technology, by copy-producing (or `reverse engineering') is not suitable for high-technology components and sub-systems which are such a significant part of military technology. There is little interchange with the civilian economy or between basic research and product innovation. There are still severe bureaucratic problems; Soviet-style management practices and structures persist, in spite of improvements. There are signs of a divergence of view between the armed forces and those responsible for military R&D, production and procurement. Finally, scientists are being lost to the growth sectors of the economy with resulting loss of skills and morale at military R&D stations.

China will not be able to take full advantage of what it has achieved unless the control of the Communist Party is relaxed, and even this will not be a sufficient condition for a better exploitation of technology.

In the unlikely event of China's leadership turning to the People's Liberation Army (PLA) for a successor to Deng, the odds are that the required additional reforms will not even be attempted and more advanced technology will not be forthcoming. More probably, China will eventually develop a more advanced military technology base and be allowed access to more military imports, but only under conditions that are consistent with a more reassuring security policy.