This is a bullpup type automatic rifle developed in China.

As you can see from the appearance, it is based on the Type 56 rifle (Chinese version of the AK), with the front and rear placement reversed to change the bullpup style.

This is more likely to have been manufactured as one of the unusual guns for export rather than for use in the military.
However, since the current Chinese service rifle is the Type 95 rifle with bullpup layout, it may be possible that a small number of 86S were delivered to the People's Liberation Army to study their development and operation...