Chinese SOEs Set Up In-house Armed Forces Departments, Readying for Massive Social Unrest: China Experts

Female and male security guards march in front of Tiananmen Gate in Beijing Saturday, May 31, 2014. A quarter century after the Tiananmen Square pro-democracy movement’s suppression, China’s communist authorities oversee a raft of measures for muzzling dissent and preventing protests. They range from the sophisticated - extensive monitoring of online debate and control over media - to the relatively simple - routine harassment of government critics and maintenance of a massive domestic security force. AP Photo/Alexander F. Yuan

Multiple recent official reports in China reveal the setting up of Armed Forces Departments (AFDs), a paramilitary entity under the supervision of both the army and the regime that oversees China’s militia, one of the largest of its kind in the world.

A major state-owned enterprise (SOE) in Shanghai, China’s commercial and financial hub, reportedly launched an AFD inside the company last Thursday.

Shanghai Municipal Investment Group (SMIG), a major infrastructure construction service and property development company run by the Shanghai municipal government, held a formal launching ceremony of its AFD on Sept. 28, with the two commanding generals of the Shanghai garrison attending, according to Jiefang Daily, an official publication of China’s Army.

Jiang Shujie, the CCP’s general secretary of the SMIG, said at the launching ceremony that the company “is a key force in urban comprehensive disaster prevention, as well as emergency rescue.” According to Mr. Jiang, the company has seven specialized emergency response teams that participate in various emergency response and disposal tasks, including urban water supply, flood control, water environment management, and hazardous waste disposal.

With the experience and resources, the company plans to “explore a path to achieve high-quality development in national defense construction in the new era,” Mr. Jiang said.

While the management claims the setting up of the AFD is for national defense, China experts believe that it is an effort of the CCP to prepare for possible massive social unrest amid domestic economic and political crises.

The Epoch Times reached out to SMIG and didn’t receive a reply as of press time.

The AFDs are affiliated with both local military garrisons and governments and oversee the militia and mobilization in times of war and emergencies among other duties.

The AFD was set up at all levels of government, educational institutions, and SOEs after the communist regime took over China and strengthened its control over China’s militia, which served as an auxiliary and reserve force for the communist regime’s regular army, and oversaw China’s national defense mobilization. The militia members are ordinary employees and equipped with guns in peaceful times. They received regular military training to prepare for possible combat or maintenance of social order.

With China shifting its focus to the economy in the 1980s, the AFD gradually disappeared from some of the government-affiliated entities or companies. It returned in recent years attracting public attention as to what role it plays amid rising unrest in China. Nonetheless, there are always militia members in government entities and SOEs, and only regular military training is either ignored or scrapped.

China has eight million militia members, according to Defense One, a military intelligence publication based in the U.S. Now these paramilitary units are coming back, according to official Chinese reports.

Large Chinese state-owned enterprises (SOEs) and government-affiliated entities have been reportedly setting up in-house AFDs since 2021.

According to a report on the official website of China’s Ministry of National Defense in May 2021, AFDs were set up in 25 SOEs in Fushun, a prefecture-level city with a population of 1.8 million in China’s northeastern Liaoning Province. The report stated that nearly 1,500 people from these 25 companies were recruited as core militia members.

Chinese militia is divided into two categories—core militia members and ordinary militia members. The core militia members are individuals who play a key role within a militia organization and are typically more experienced, better trained, and hold leadership positions within the militia, often serving as the backbone of the group. Militia members are civil workers in times of peace and become soldiers in times of war.

On Aug. 31, 2023, the Wuhan Agricultural Group, which is a state-owned company run by the Wuhan municipal government of China’s central Hubei Province, set up its own AFD, according to an official report on the municipal government website of Wuhan.

The agricultural company was established in September 2020, the year in which the pandemic broke out in Wuhan. Its business covers six major sectors, including agricultural finance, landscaping and greenery, aquaculture and livestock, property development in rural areas, capital operation, and tourism.

The report states that in addition to Wuhan Agricultural Group, eight other SOEs in Wuhan have also set up in-house AFDs since 2023.

In Nantong, a city on the eastern coast of China’s Jiangsu Province, which has a population of 7.7 million, the Haian City Construction Development Investment Group set up its AFD in July, which is the first to be established in an SOE in the city, according to a press release on the official website of the municipal government.

In Huizhou, a city in China’s southern Guangdong Province, the Huizhou City Construction Investment Group held a launching ceremony of its AFD on Aug. 3, 2023, according to a report on the company’s official website.

Mengniu Dairy, a major Chinese manufacturer of dairy products located in Horinger, a county of Inner Mongolia Autonomous Region in northern China, held the launching ceremony of its AFD on May 25th. The commanding officer from the local garrison attended the ceremony, along with several county government leaders, management of the company, and about 60 core militia members attending the ceremony, according to a press release on the county government’s website.

Chinese vessels, believed to be manned by Chinese maritime militia personnel, are seen at Whitsun Reef, South China Sea, on March 27, 2021. Philippine Coast Guard/National Task Force-West Philippine Sea/Handout via Reuters

ADFs Set Up for Increasing Social Unrest: China Experts

Despite reported speculations of China preparing for war by setting up the AFDs in SOEs, China experts tend to hold that these departments are readying the in-house militia for possible massive domestic and social unrest in China.

Zhang Tianliang, a prominent expert in Chinese and American politics, noted that a series of defaults have occurred in China’s real estate industry following Evergrande’s default, which was like the “first domino to fall.”

“As a result of the chain reaction of the series of defaults, corresponding protests will emerge, involving homeowners of unfinished properties and investors who lost their principal and returns, among others,” said Mr. Zhang in one of his video channels on Oct. 3.

Mr. Zhang estimated that the total debt owed by municipal investment companies in China accounted for roughly 60–70 percent of China’s annual gross domestic product (GDP), amounting to about $903 billion.

“As China’s largest debt issuers, these investment companies have become a primary target for investors, following the series of real estate defaults,” Mr. Zhang said in his program.

He believed that the setting up of ADFs in the investment companies is in the interest of China’s urban investment and real estate companies under such circumstances. He also said that protests will break out in other sectors as well.

The property sector’s defaults have resulted in massive debt collection campaigns in China, including homebuyers, investors, and construction workers.

Public resentment against the CCP arises in other sectors. Social unrest began to emerge on a large scale during the three years of the COVID-19 outbreak. The communist regime’s stringent zero-COVID policies triggered massive protests across the country during the pandemic, with protestors demanding the CCP to “step down.” China’s strict lockdown measures resulted in a sluggish economy and a record-high youth unemployment rate.

A video posted on China’s Facebook-like social media platform Weibo shows military training at Chuxiong Normal University in China’s southwestern Yunnan Province. In the video, the school authorities make some students play wage claimants demanding unpaid wages or salaries, while some other students play riot police suppressing the protesters who want their money back.

Lai Jianping, a former Chinese lawyer now living in the United States, believes that social unrest exists in many other sectors, not just in wage collection.

Mr. Lai told NTD, The Epoch Times’s sister media, that the online video serves both as an indoctrination and a warning.

“It [the online video] serves as a threat, telling the students and the audience: ‘No matter what injustice you encounter, if you take to the street to protest, you will be cracked down ruthlessly, just like these wage claimants,’” Mr. Lai told NTD on Wednesday.

He said that the whole country, including the institutions of higher education, is preparing for what the CCP calls “maintenance of social stability,” which shows that social injustice in China has been widespread.

Under the Law of the People’s Republic of China on National Defence (“the law”), the Chinese armed forces have three major categories: the People’s Liberation Army (PLA), the People’s Armed Police, and the Militia. The law requires that the Militia “shoulders the tasks of preparations against war and defense operations and assists in maintaining public order” in China.

Li Jing contributed to this report.