After the Sino-Soviet split, the Soviet Union withdrew its technical staff and support to China's arms industry. China's 617 Factory (Inner-Mongolia First Machine Group Co Ltd) was instructed to improve on the T-54A design (Type 59 MBT) in 1963, and created the Type 69. Improvements include a dual-axis stabilized 100 mm smoothbore gun, a new 580 hp engine, and an IR search light. However, the People's Liberation Army was not satisfied with the version, and it did not enter serial production. Some Western analysts[who?] incorrectly identified the Type 69 as a Chinese copy of the Soviet T-55, as opposed to the Type 59 being a copy of the T-54A.
During the 1969 Sino-Soviet border conflict, the PLA was able to capture a Soviet T-62 MBT. The captured tank was examined, and some of its components, such as the Soviet Luna IR searchlight system, were copied and integrated into the Type 69 design. The Type 69 and Type 79 tanks became the first independently Chinese-developed main battle tank. However, the early version of the Type 69 was only in limited quantities. The PLA was unsatisfied with the Type 69's performance, but ironically it became one of China's most successful armored vehicle exports. Over 2,000 were sold worldwide in the 1980s.
Relations between China and the West warmed in the 1980s, and China was able to import some Western technologies to improve its weapon systems. The Type 69 was upgraded with Western systems such as the British Marconi FCS, and the L7 105 mm gun. The new version received the designation Type 79, which represented the conclusion of China's first-generation tank development.
The simplicity, robustness and low cost of the tanks made them attractive on the export market, and China sold hundreds to both sides during the Iran–Iraq War. (Gelbart 1996:18) Many of the vehicles were later used by Saddam Hussein during the Gulf War and the 2003 Iraq War.
Myanmar Army Type 69 tanks also reportedly engaged Royal Thai Army M60A3 tanks in 2001 during the battle for Border Post 9631, although it is unclear if either side lost any vehicles.
Both the Type 69 and Type 79 tanks share almost identical hulls and turrets with the older Type 59. The only difference is that the two more recent tank models have been upgraded with better technologies that were either captured or bought from more advanced countries. (Gelbart 1996:17-19) The Chinese Type 59, 69 and 79 tanks can therefore be viewed as part of the same, evolutionary tank family in the same way that the Soviet T-54, -55 and -62 tanks share a common lineage. Only in the mid-1980s did the Chinese gain the expertise to begin experimenting with new indigenous tank designs that were not cast from the mold of the Type 59/69/79 family, and only in the 1990s did China begin producing truly modern tanks. (Gelbart 1996:20-24)
Today only a couple hundred Type 69/Type 79s remain in PLA inventory, mostly deployed with training or reserve units. The Type 69/Type 79 are being replaced by the newer Type 96 and Type 99 MBTs. The Type 69 is also known as WZ-121 by the manufacturer (NORINCO).