Chinese Aerospace Firm Banned From PLA Military Procurement for 1 Year Over Bid-Rigging Allegations

A Chinese state-owned aerospace engineering firm has been barred from participating in military procurement activities for one year over alleged bid-rigging in a case dating back nearly a decade, according to an official notice published this week on China’s military procurement platform.

The announcement, released on May 22 by the People’s Liberation Army (PLA) procurement network, states that China Aerospace Systems Engineering Co. was found to have engaged in “bid rigging” and other violations during a 2017 procurement activity. Starting May 22, the company is prohibited from participating in PLA materials, engineering, and service procurement for one year.

The notice appears to have been removed from the PLA procurement platform since then.

The penalty also extends to other companies controlled or managed by the firm’s legal representative during the suspension period.

Insiders who spoke to The Epoch Times on the condition of anonymity or revealing only their surnames out of fear of reprisal linked the move to broader anti-corruption efforts inside the military and ongoing restructuring within the PLA Rocket Force.

Reopening Old Cases

An insider close to the PLA’s military system told The Epoch Times that the case should be viewed in the context of a wider internal purge following recent leadership changes and investigations involving senior military figures.

“After Zhang Youxia’s case came under scrutiny, the entire Rocket Force system underwent a series of changes,” the insider said. “Commanders were replaced, officers promoted during that period were reviewed one by one, and after individuals, companies were also investigated.”

The insider said that procurement-related corruption in the military extends beyond the publicly disclosed case, alleging that similar or more serious practices exist within other defense-related enterprises.

“These cases cannot be seen as just one company being punished,” the insider said. “There are military-industrial firms involved in bid-rigging that are even more serious, but they cannot be made public.”

The claims could not be independently verified by The Epoch Times.

Systemic Corruption in Military Procurement

A retired Chinese military officer who is familiar with the PLA’s defense procurement told The Epoch Times that procurement has long been a major source of corruption within the armed forces.

“Military procurement is a lucrative sector,” the officer said. “At the highest level, it goes back to the General Armament Department. If the Central Military Commission investigates individuals, procurement cases often come up as well. Normally, no one investigates procurement on its own.”

He added that long-standing relationships between the PLA’s military procurement agencies and state-owned defense contractors make oversight difficult.

“These are not ordinary suppliers,” the officer said. “There are long-term relationships. Whether there were instructions, prearranged winners, or coordinated bidding—this is all very opaque.”

Corporate records show that China Aerospace Systems Engineering Co. was founded in 1993 and is based in Beijing’s Fengtai District, with registered capital of 740 million yuan ($110 million).

The company is owned by China Aerospace Science and Industry Corp. (CASIC), one of China’s major state-owned defense conglomerates involved in aerospace systems, weapons development, and civilian-industrial integration projects.

CASIC is part of China’s broader military-industrial complex and plays a significant role in defense manufacturing and systems integration.

A Chinese legal professional familiar with the PLA’s military procurement, surnamed Li, told The Epoch Times that bid rigging typically involves prearranged agreements between multiple companies.

“Bid-rigging is not just clerical misconduct,” he said. “Companies coordinate in advance on who will win, who will submit supporting bids, and at what prices. The winning bid is often inflated above market value, which creates room for corruption.”

Li said that such schemes often involve multiple participants rather than isolated individuals.

“It is usually a chain of people, not just two or three actors,” he said.

Wang Fei contributed to this report.