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Key military enterprises in China can conduct shareholding system reform, according to Sun Qin, deputy minister of the Commission of Science Technology and Industry for National Defense, the Beijing News reported today.

Military enterprises involved in strategic weapon production and the nation's strategic safety and significant State secrets, must be wholly owned by the State, Sun said.

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On the premise that key military assets won't be reformed under the shareholding system, major military enterprises' general-purpose equipment and secondary operations are allowed to be restructured.

The State must hold majority stakes in military enterprises engaged in design, assembly and special spare parts production for key weapons, Sun said.

Domestic capital is encouraged to participate in military enterprises' shareholding reform; military enterprises are also allowed to conduct market-oriented reorganization, alliances and mergers; they are also permitted to lease out, sell or auction their non-core assets.

Except for the previously mentioned two kinds of military enterprises, other enterprises engaged in key weapon production can perform shareholding reform in various ways.

Eligible military enterprises can also raise money on domestic and overseas capital markets, Sun said.

China will also issue weapon research and production licenses to more enterprises and give more favorable policies to support military enterprises.

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