But the PLA feels that it has been duped. This year's compensation is apparently based on a figure the PLA gave to Zhu before July, which said the companies had earned 3.5 billion renminbi on revenues of 150 billion renminbi in 1997. Most foreign estimates put profits at 10 times that. Even the official China Daily Business Weekly said the companies had earned about 5 billion renminbi a year, one of the first times such a figure was published. The PLA apparently wanted to conceal the size of its empire.
Tempers are now short as talks continue on a further subsidy next year.
Next year's package could be even more acrimonious because it is supposed to include payments for golden handshakes for the hundreds of top-ranking officers who are having to leave their privileged perches at the top of the companies. One deputy commander from an army unit in the southwest, who earned 80,000 renminbi from the companies under the unit in the four years until last year, complains that he has had to bring his daughter back from private boarding school in Britain as a result. Still, despite the difficulties, Beijing has a big stake in a smooth withdrawal of the PLA from business. As with many past initiatives by Jiang, the PLA divestiture was supposed to set an example for other areas of the government and party to follow. Indeed, the order to the military to divest also included the paramilitary People's Armed Police, the judicial system and the police.