The plan will reduce the size of the Chinese military to some 1.85 million troops and focus on demobilizing non-essential personnel, Chinese and Western sources told the daily.

Dozens of military hospitals will be put under local civilian authorities, command headquarters will be closed and military schools will be merged.

Some of the demobilized soldiers will be transferred directly to the People's Armed Police, China's one-million-strong internal security force, the daily said.

The second major Chinese troop cutback since 1997, however, will not be accompanied by an overhaul of the military's command structure, two Chinese sources told the daily.

Broad structural changes in the Chinese army are not expected while former president Jiang Zemin is chairman of the Central Military Commission.

The streamlining will cut the number of military regions from seven to six, merging the Jinan Military Region with the Nanjing Military Region, which leads China's unification efforts with Taiwan, said the sources.

The Chinese arsenal targeting unification with Taiwan, military analysts said, will continue to grow and will require the creation of a war-fighting command structure that can integrate army, navy, air force and rocketry forces.

China's military are already building and training with amphibious craft, and have bought from Russia dozens of advanced fighters, four diesel submarines and two advanced destroyers.

These acquisitions, the military analysts said, are intended to create a force capable of intimidating Taiwan and thwarting US intervention in any conflict between China and Taiwan.

WAR.WIRE