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To improve anti-submarine capabilities, the second Qingdao produced Type 037 (pennant 617, production number 38) was equipped with NJ-4A stabilizer fins, a Type ZST-2 depth charge command system, and a tripod foremast in place of a pole and a short stub mainmast. After successful trials, this third iteration of Type 037 design by 701 Institute was incorporated as the production standard. Starting from October 4, 1982 (pennant 723, production number 28), all subsequent builds were designated Type 037JZ. A total of 26 examples were built.

April 14, 1984, Type 037 pennant 725 (production number 30) was refitted with a Type 1211 fire-suppression damage control system for testing. After the successful completion of the test, the Type 1211 system was coded as the standard from production number 68 (pennant 731) onward. The first Type 037 to be equipped with an integrated navigation system was production example number 9 (pennant 740). From production number 10 (pennant 741) on, all ships were equipped with remote control computers for small radar-equipped drones from Factory 405 and the Harbin Ship Institution. Starting from production number 70 in 1986, all production examples were built using a design with improved crew conditions.

In total, there were 24 major modifications to the basic Type 037 design including: NJ-4A stabilizer fins, RBU 1200B 5-tubed fixed mortars, a dual-gyro compass, SJD-3A sonar, Type 923-1 Radar Recon Drones, Type 945 passive electronic jamming system, DK-1B drone remote control computer, Type 1211 fire suppression damage control system, an all-stainless steel kitchen, a 320kg crane, CSS-59 depth charge system integrated with ZST-2 depth charge command system, closed-circuit TV, and telephone to all compartments. Speed decreased to 29.5 knots and standard displacement increased to 382 tons. All Type 037 boats in-service were refitted to this standard.

As technology marched on, and more modern ocean-going combatants entered PLAN service, the mission of the original Type 037 changed from antisubmarine to long-range Fast Attack Craft (FAC). The Type 037 has proven to be very inexpensive to maintain, possesses great seaworthiness, and is well-liked by its crews. China has a coastline of 14,500 km (7,821 nm), requiring a large number of craft such as the Type 037 to patrol it. By most estimates the number of Type 037 still in service is close to 100.