China North Industries Group Corporate (CNGC). October 2014.

This working paper attempts to unpick the structure of China North Industries Group Corporation (CNGC), one of China’s largest state-owned companies.

The International Peace Information Service (IPIS) and the Omega Research Foundation (Omega) have undertaken a comprehensive review of one of China’s largest state-owned companies. Norinco – known formally as China North Industries Group Corporation (CNGC) was established in 1999 and consists of at least 46 member units which then have several subordinate companies, joint ventures and associate companies. CNGC’s main purpose is to research, develop and manufacture weapons and military equipment for the Chinese armed forces. To accomplish this primary task CNGC combines military research objectives with civil development and production enterprises and often the two are difficult to separate. CNGC is also involved in other industries such as mining and petroleum (often overseas) as well as the associated processing industries – which provide raw materials for CNGC and other Chinese companies as well as giving China and CNGC access to international markets. Over the decades CNGC and many of its subsidiaries have established joint ventures or licensed manufacturing agreements with various Western companies to manufacture civilian products which have then been incorporated in the military and/or law enforcement products of CNGC. This is of particular concern to the USA and the EU, both who both brought in arms embargoes against China following the 1999 Tiananmen Square massacre.

We believe that this review shows the complex interaction between the civilian and military sections with supposedly civilian enterprises manufacturing equipment or components for the military, or providing them with raw materials. We hope this will make policy makers and export control departments more aware of the issue of exporting equipment and technology to China. Our research has uncovered several subsidiaries that we previously thought had no link to CNGC. However, the list is still incomplete and we would welcome any additions or clarifications you may have.