Most of China's army is still armed and equipped like an American force from the 1960s. But over 100,000 troops do have more modern weapons and equipment. And each year, China holds several military exercises, each involving a few thousand troops, live ammunition and lasting a week or two. Sometimes foreign observers are allowed, but most of the time these events are classified top secret. What the Chinese are trying to do is develop the most effective tactics for their poorly equipped army. The generals accept the fact they will never get enough money to equip their troops to Western standards. Instead, they are building a small (about ten percent of their force) "modern" army, for special operations, and as a constant reminder to the government of what Chinese troops can do if they have modern weapons and equipment.
The generals need all the good publicity they can get, because the government recently announced plans to shrink the armed forces by another 700,000 troops in the next three years, and put most of the savings into upgrading the navy and air force. The Chinese armed forces has already shrunk by 1.7 million troops in the last twenty years, and now consists of 2.3 million active duty personnel. In three years, there will be only 1.6 million troops (not much larger than the 1.5 million American force). China also has 660,000 personnel in the national police, and 1.2 million organized reservists.
There are other changes in the works. The ratio of officers to troops has been changing, with a sharp reduction in the number of officers, and the growth of the number of professional NCOs (sergeants). Until recently, about a third of the Chinese military personnel are officers. This high proportion of officers was adopted from the Russians, who did not want to develop a professional NCO corps. But the Chinese are developing professional NCOs as well, and another third of the force are NCOs, or long term enlisted troops working towards becoming NCOs. To attract high quality conscripts, who will stay in the service to become NCOs, the military offers bonuses and help with college tuition. It will even take college graduates and promote them, right after basic training, to an NCO rank.
As the military has shrunk over the last decade, most of those laid off have been officers. Most of the shrinkage itself came from simply not enlisting a lot of new recruits. Meanwhile, older, and less educated officers are being retired, and new, better educated ones, sought among the ranks of recent college graduates. The military used to rely a lot on enlisted troops becoming officers, via selection and a few months training. No more. With 20 percent of Chinese 18 year olds going to college, there is an opportunity to quickly upgrade the officer corps (at least in terms of formal education.)
Currently, the navy has 290,000 personnel, and the air force 400,000. The navy may add some people (as they add ships), while the air force may lose a few (because of retirements among the large number of obsolete aircraft still in service). The army will lose a lot of infantry, and unneeded headquarters. And everyone in the military will have to be smarter, more educated and better at their jobs, if they want to stay in uniform.