China’s avi­a­tion dream takes flight but only with help from west

Financial Times USA - - I NTERNATIONAL - Ben Bland ben.bland@ ft.com

The first time China at­tempted to build a large pas­sen­ger jet, it tried — and failed — to re­verse-engineer a Boe­ing 707 that had crash­landed in Xin­jiang in 1971. The lat­est ve­hi­cle for China’s avi­a­tion dream, the Co­mac C919, has just com­pleted its first test flight af­ter Bei­jing de­cided to take a dif­fer­ent path: buy­ing parts from Euro­pean and US avi­a­tion com­pa­nies rather than steal­ing their tech­nol­ogy.

Af­ter many mis-steps, the maiden flight of the 174-seat air­craft was a big mo­ment for China, eco­nom­i­cally and po­lit­i­cally. The govern­ment told state-owned Co­mac in a con­grat­u­la­tory note that the C919 “car­ries great weight and im­por­tance to the coun­try’s in­no­va­tion drive”.

The C919 is de­signed to com­pete with the work­horses of short-haul avi­a­tion, the Air­bus A320 and Boe­ing 737. It has a ready-made cus­tomer base as China is fore­cast to over­take the US as the world’s big­gest avi­a­tion mar­ket in 2024.

Co­mac has also built a smaller re­gional jet, called the ARJ21, and is de­vel­op­ing a long-haul air­craft along­side Rus­sia’s United Air­craft Cor­po­ra­tion.

China has been try­ing to build large pas­sen­ger air­craft since the Mao Ze­dong era, when com­mu­nist of­fi­cials bri­dled at hav­ing to fly over­seas on for­eign-made air­craft.

Pres­i­dent Xi Jin­ping, who of­ten trav­els abroad on a Boe­ing 747 op­er­ated by Air China, is un­likely to start fly­ing on the C919 soon, as it will be at least a cou­ple of years be­fore it goes into mass pro­duc­tion.

But China’s air­liner project is still driven by pol­i­tics as much as pol­icy. At the Co­mac fac­tory in Shanghai, com­mu­nist pro­pa­ganda ban­ners urge work­ers to knuckle down to achieve the Chi­nese avi­a­tion dream. “Re­mem­ber your mission, march for­ward and win the ‘three bat­tles’,” says one, re­fer­ring to the mar­kets for re­gional, short­haul and long-haul jets.

Mr Xi is keen to show progress on high-pro­file ini­tia­tives be­fore the five-yearly congress of the Com­mu­nist party in the au­tumn, where he aims to strengthen his grip on power.

By suc­cess­fully bring­ing the C919 into mass pro­duc­tion, Co­mac would join the se­lect club of com­pa­nies with the tech­ni­cal ex­per­tise to build large pas­sen­ger jets in­clud­ing Boe­ing of the US, Europe’s Air­bus, Canada’s Bom­bardier and Rus­sia’s Sukhoi and Tupolev.

In ad­di­tion to pres­tige, China wants to re­duce its re­liance on for­eign air­craft man­u­fac­tur­ers, pri­mar­ily Boe­ing and Air­bus. But, para­dox­i­cally, the C919 has got this far only be­cause of the co-op­er­a­tion of west­ern sup­pli­ers. The wings and tail are made in China, but many of the most im­por­tant and tech­no­log­i­cally ad­vanced parts are pur­chased from for­eign com­pa­nies, such as GE and Safran, which pro­vided the en­gine, and Honey­well, which sup­plied the wheels and brakes and com­mu­ni­ca­tion and nav­i­ga­tion sys­tems.

Buy­ing com­po­nents from in­dus­try lead­ers has sped up the devel­op­ment process. But the C919 is still 10-15 years out of date, com­pared with the lat­est ver­sions of the A320 and Boe­ing 737, mean­ing it will prob­a­bly cost more to run.

That need not dent sales of the air­craft as most of China’s air­lines are state-con­trolled and can eas­ily be en­cour­aged to use it. There are al­ready or­ders for more than 500 C919s.

If China re­ally wants to com­pete with Boe­ing and Air­bus, it will have to sell its air­craft in de­vel­oped mar­kets, which will re­quire bet­ter tech­nol­ogy and hard-to-achieve cer­ti­fi­ca­tion from Euro­pean and US reg­u­la­tors.

That is where Bei­jing may hit the lim­its of Chi­nese avi­a­tion with west­ern char­ac­ter­is­tics. Chi­nese of­fi­cials have a his­tory of cov­er­ing up tech­ni­cal prob­lems with do­mes­ti­cally pro­duced air­craft. Cor­rup­tion, politi­cal in­ter­fer­ence and a lack of trans­parency make west­ern reg­u­la­tors ner­vous, and un­der­mine the po­ten­tial for in­no­va­tion in China.

Derek Levine, who wrote The Dragon Takes Flight, a book on China’s avi­a­tion am­bi­tions, warns that “un­less China learns how to make the most so­phis­ti­cated el­e­ments of a plane, they’ll al­ways be a step be­hind”.

If China wants to com­pete with Boe­ing and Air­bus, it will have to sell in de­vel­oped mar­kets

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