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During the 1980's and 1990's, the PLA became extensively involved in creating a business empire that including companies in areas not normally associated with the military (i.e. travel and real estate). Much of the motivation for this was to supplement the PLA's normal budget whose growth was restricted. In the early 1990's, the leadership of the Communist Party and the high command of the PLA became alarmed that these business transactions were in conflict with the PLA's military mission. The business interests of the PLA were eroding military discipline and there were reports of corruption resulting from the PLA businesses. As a result, the PLA was ordered to spin off its companies. Typically, the actual management of the companies did not change, but the officers involved were retired from active duty within the PLA and the companies were given private boards of retired PLA officers. Military units were compensated for the loss of profitable businesses with increased state funding. |
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