The Chinese military will stop all of its commercial activities before the end of the year, under a new guideline unveiled on Monday.
The guideline, released by the general offices of the Communist Party of China Central Committee, State Council and Central Military Commission, said that stopping all of the military's commercial activities is a strategically important decision made by the Party, the Central Military Commission and Xi Jinping, general secretary of the CPC Central Committee, and is a significant part of the ongoing reform of national defense and the military.
It said the work has entered a crucial stage that requires determination, planning and cooperation between the military, local governments and Party committees.
Units of the People's Liberation Army and the Armed Police Force must ensure that their commercial activities are halted before year's end and their assets be maintained at their current value during the process, the document said.
Contracts between the military and civilian entities that will not conclude by year's end should be terminated by that time through negotiation or legal procedures, it said, adding that compensation will be given for economic losses.
Under the guideline, commercial activities with "sophisticated situations" should be dealt with in a flexible manner such as entrusting civilian entities to manage them.
It urged government and military departments to make policies to regulate nonmilitary programs assigned by the central government in the future.
The document said all properties, land and reception facilities owned by the military and used for commercial purposes will be administered and allocated by the Central Military Commission.
The Chinese military started running its own businesses in the mid-1980s to offset a defense budget decrease.
In 1992, the Central Military Commission approved commercial activities by the PLA and the Armed Police Force. In February 2016, the Central Military Commission ordered the PLA and Armed Police Force to halt commercial activities within three years.
Many corruption cases involving senior officers were closely connected to the military's commercial activities, and the military's involvement in commercial sectors aroused public concerns, said Senior Colonel Gong Fangbin, a political education researcher at PLA National Defense University.