China’s military disqualifies procurement company for ‘serious risks’ of leaked secrets

PLA cuts ties with China Far East International Tendering Co, saying it violated confidentiality rules while purchasing for strategic support force
Military says company forwarded information through email and WeChat and stored confidential documents on unprotected computers

China’s military

Amber Wangin Beijing

Published: 10:00pm, 13 Mar 2024

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The People’s Liberation Army has disqualified a procurement company for posing “a serious threat” of leaking secrets, according to a notice issued by the Chinese military’s equipment department on Tuesday.

China Far East International Tendering Co violated confidentiality rules while carrying out purchases for the PLA’s strategic support force, according to the notice issued on the military’s equipment procurement information site.

The PLA’s Strategic Support Force, established in 2015, is the core of the military’s integration and modernisation plan and is tasked with integrating “strategic” functions across the military – from space and the internet to psychological warfare. The force also serves as an intelligence gathering hub.

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China is ramping up scrutiny of confidentiality issues amid growing tensions with Washington and its allies. Beijing passed a major amendment tightening its state secrets law last month.

The law stipulates that it is illegal to send state secrets via the internet without taking proper confidentiality measures.

Tuesday’s announcement did not mention the state secrets law, instead citing PLA regulations. It said the company violated “relevant regulations including the management measures for equipment procurement tender agency services”.

The notice said that the company violated regulations by “forwarding a large amount of procurement announcement materials” through emails and WeChat, a Chinese social media platform.

The company also stored a large number of confidential documents on unprotected computers, it said.

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The notice was issued by the scientific research ordering bureau of the Central Military Commission’s equipment development department.

The company’s management of confidential information was “out of control”, causing “serious risks and threats of leakage”, the notice states.

It said the company’s qualifications as an equipment procurement tender agency had been revoked, and relevant military units were no longer allowed to sign new contracts with the company.

Existing services will also be terminated or “handled properly”, depending on the status of the project, according to the notice.

Meanwhile, the military units should promptly check and hand over documents and materials to “ensure that no security issues arise”, the announcement states.

China sacks missing defence chief Li Shangfu with no explanation

The news comes after a sweeping investigation into military equipment procurement by the equipment department. In a rare move, the department issued a notice in July for investigations into problems including “leaking information” on projects and helping certain companies secure bids.

It also follows a purge of senior military officials. In December, nine generals – including a number of senior members of the PLA Rocket Force, as well as two from the CMC’s equipment department – were dismissed from China’s top legislature. They included Rao Wenmin, the equipment department’s deputy director, and Zhang Yulin, who served in the same role from 2016 to 2018.

Additionally, Li Shangfu – who led the equipment division from 2017 to 2022 – was sacked as defence minister in October with no explanation given. He has not been seen in public since August.

China Far East International Tendering’s lines of business include international trade and procurement services as well as services related to “military products”, according to the company’s website.

It was also among the top 10 bidding agencies for classified military industry projects in 2017, the website states.