Returning to its roots in the countryside, the Chinese Communist Party (CCP) is going local to pursue its grand ambitions. During the Two Sessions, the annual gathering of China’s top political and military leadership, paramount leader Xi Jinping called for local governments to allocate more civilian resources to support military modernization.
The announcement, which followed a notable increase in military spending, signals Xi’s desire to elevate military-civil fusion (MCF) — a policy that requires civilian firms to integrate into the country’s defense industrial base — as the People’s Liberation Army (PLA) strives to reach its modernization goals.
Two Sessions Highlights ‘Military-Local Collaboration’
Xi’s demand for additional resources and joint planning during the Two Sessions underpins Beijing’s emphasis on “military-local collaboration” to modernize its forces. Speaking at China’s legislature, known as the National People’s Congress (NPC), and the Chinese People’s Political Consultative Conference, the NPC’s top advisory body, senior PLA officers pushed local governments to allocate additional land for training and to prioritize the construction of joint civil-military infrastructure. These demands included greater local investments in dual-use scientific research, particularly on unmanned weapons systems, underseas warfare capabilities, and cyber warfare.
The calls for ever-greater local support came as Beijing announced a significant increase in science-oriented and military spending while adopting an increasingly aggressive tone toward Taiwan. Despite economic stagnation, China’s most recent budget, released during the meetings, promised to increase defense spending by 7.2 percent and science and technology spending by 8.3 percent, significantly above its economic growth target of roughly 5 percent. The conference also featured a series of direct threats to Taipei, with PLA spokesperson Wu Qian claiming that “the more rampant ‘Taiwan independence’ separatists become, the tighter the noose around their necks and the sharper the sword hanging over their heads will be.”
China Heightens Embrace of Military-Civil Fusion
Beijing’s pursuit of MCF remains a critical aspect of Xi’s aims to supplant the United States as the world’s leading power. Though formally instituted by Hu Jintao in 2007, the policy has rapidly expanded under Xi to encompass a broad range of civilian sectors, reflecting the expansion of the PLA’s modernization campaign.
The ongoing embrace of “military-local collaboration” indicates the shifting nature of China’s science and technology ecosystem amid a period of heightened concern over military readiness. As Beijing pours subsidies into its science and technology base to solidify its technological self-sufficiency, local governments have also increased support to “little giants” — small to medium-sized firms developing niche technological capabilities essential for contemporary combat. This trend has only accelerated as Beijing prepares to adopt the 15th Five Year Plan, a major policy document, and the PLA nears its latest modernization benchmark, currently set for 2027.
Washington Must Starve China’s Science and Technology Sector
In response, the United States should work to starve China’s science and technology ecosystem of American capital and knowledge with the aim of complicating Beijing’s efforts to gain a military advantage. These measures should include screening outbound investment into Chinese technology firms, maintaining and enacting stricter export controls on emerging technologies, and curtailing the joint U.S.-China Science and Technology Cooperation Agreement negotiated under the Biden administration.
Washington should also embrace greater domestic investments to maintain its lead. The White House, in consultation with Congress, should prioritize funding the National Science Foundation and other federal science programs to retain America’s lead in emerging technologies. These measures should be coupled with stronger defenses against Chinese intrusions into the U.S. science and technology sector, including restarting the China Initiative to combat espionage. To keep pace with China’s military and scientific investment, the Trump administration should also work with Congress to boost defense spending by 3 to 5 percent above inflation each year.
Jack Burnham is a research analyst in the China Program at the Foundation for Defense of Democracies (FDD).Johanna (Jo) Yang is a research and editorial associate at the Center on Cyber and Technology Innovation (CCTI) at FDD, where she works on issues related to nation-state cyber threats, critical infrastructure protection, and U.S. cybersecurity policy. For more analysis from the authors, CCTI, and FDD’s China Program, please subscribeHERE. Follow Jack on X@JackBurnham802. Follow FDD on X@FDD and@FDD_CCTI. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.
Issues:
China Cyber Military and Political Power U.S. Defense Policy and Strategy