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China has issued a new policy to encourage private companies to invest in the national defense industry, Xinhua learnt from the Commission of Science Technology and Industry for National Defense on Thursday.

The country will support and guide private companies producing and researching military equipment and restructuring military firms, according to guidelines recently issued by the commission.

Private companies are also encouraged to develop and industrialize high technologies for both military and civil use, said the guidelines.

The new policy will help the country's national defense industry make better use of funds and technologies owned by private companies, boost its innovative capabilities and improve weaponry research and production, said an official with the commission.

Last year, the commission issued licenses for private companies to branch into China's weaponry industry, breaching the long-standing state monopoly on the sector for the first time.

"As the defense sector concerns national safety, private companies must enter the industry gradually in a safe and regulated way," said the official, who did not give his name.

Private enterprises must enhance the awareness of secrecy, accept government supervision and fulfill military research and production tasks, the commission said in the guidelines.

(Xinhua News Agency March 2, 2007)