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China’s jumbo-sized dreams

January 7, 2008 by Evan Sparks

Welcome, Airliners.net readers! I hope you’ll poke around the site and subscribe to my RSS feed to get the very latest.

The Chinese were nestled all snug in their beds,
While visions of jumbo jets danced in their heads.

China, not stopping with its forthcoming small-to-medium-size civilian jetliner, is moving forward with its jumbo jet program. Its two state-run and owned aerospace companies, AVIC I and AVIC II, will be restructured. AVIC I (an acronym for China Aviation Industry Corporation) produces larger jets, both civilian and military, and AVIC II focuses on small aircraft and helicopters, both military and civilian. The word is that a new company will be launched by March 2008 to handle the jumbo jet program. The civilian jets will be a twin-aisle, twinjet, 200-300 seat CS2000 (pictured above, and in the vein of the Boeing 787 or Airbus A330) and a single-aisle, 150-200 seat CS2010 (along the lines of a Boeing 757). Eventually, a military-use jumbo jet will be offered (see the illustration below from Xinhua).

AVIC I and II will be reworked to produce parts and equipment for the jumbo jet program, in addition to continuing their own product lines. These developments raise the question of why China is going this direction. The global market for large aircraft is well-served by Boeing and Airbus, both of which produce excellent aircraft without being centrally managed by the state. Furthermore, both Airbus and Boeing compete in an open international market. I’ve written elsewhere that China may attempt to use its emerging network of proto-client states in Africa, Southeast Asia, and Latin America as a market for uncompetitive Chinese products.

More worrisome is China’s insistence on “homegrown” aircraft. Just as the major aircraft producers are developing sophisticated international supply chains and moving toward truly global jets (the B787 is 25 percent foreign-produced, and parts are manufactured all over the United States), China wants to move in the direction of nationalism. They’re not there yet (many components of the ARJ21 are U.S.-made), but China’s jumbo-jet drive illustrates a troubling trend.

China’s determination to produce a large jet (as if that is a sine qua non of superpower status), combined with the fact that the industrial drive is being managed from Beijing, means that China is ignoring the market for the jets which it will produce. Maybe the market will accommodate the Chinese product, but it might not. Famously, Boeing almost went bankrupt in the 1960s producing the eventually successful B747 for an untested widebody market. The state-owned company that will produce the CS2000, CS2010, and larger jets will probably not be exposed to such risk, and the absence of risk may severely distort the market for commercial aircraft.

China’s major aircraft companies to restructure as ‘jumbo’ jet tops agenda [ATW Daily News]
China to establish company to build large jet [Reuters]

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Posted in Evan's Commentary | Tagged aerospace, asia, nationalism, prestige, travel, world | 5 Comments

5 Responses

  1. on January 8, 2008 at 10:10 am krsnakhandelwal

    China has always had ambitious plans since times immemorial, it has to do things in the same scal as the China wall, cost benefit relationship is not their cup of tea.


  2. on January 8, 2008 at 11:28 am Evan Sparks

    And they’re sending a man to the moon, too.

    Yet another example of how prestige and policy conflict.


  3. on July 12, 2008 at 8:54 pm Alex

    Hum, so Boeing and Airbus are purely commercial projects? Why do they get billions in government subsidies then? Remember, western countries are currently placing an embargo on aviation technology to China. Why should China not develop those technology on its own? Besides, the aviation industry creates a large number of very high paying jobs. Surely China wants those jobs just like US and Europe.


  4. on July 14, 2008 at 7:42 am Evan Sparks

    There’s a qualitative difference between companies that receive subsidies or contracts from governments (Airbus, Boeing, Bombardier, Embraer) and companies that are owned and operated by the government for expressly geopolitical purposes (ACAC in China, UABC in Russia). A huge gap.


  5. on July 14, 2008 at 9:59 am Alan

    Disclaimer: I am a Chinese lic=ving in Toronto, Canada. I am responding to Evan’s comments on an objective basis. No bias involved.

    I don’t see any reason why China shouldn’t develop its own jet, and it will definitely bring in non-Chinese experts during the development and production phases to make their effort credible.

    For all non-Chinese people please don’t forget that after the early turbulent years (since 1949 and before the 80s to be exact) the Communist government in China simply follow the footsteps other countries (Taiwan, Korea, and even the States) had already completed many years ago in terms of industrial & technological development. In other words, China started its modernization at least 30 years behind other major powers, and now it’s playing catch-up at a lightning pace.I don’t see anything wrong with it.

    Give the country a chance, and see what it spits out and judge later.

    Cheers,

    Alan



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