Chinese aviation industry sees new wave of restructuring
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A new wave of restructuring is in the works for China’s aviation industry, and the 13th Beijing International Aviation Expo, which took place on September 23, saw evidence of the trend. According to the Economic Information Daily, many provinces and municipalities represented at the Expo have plans to launch aviation projects, while new aviation industrial parks are also under construction across the country.
Tianjin
Tianjin attracted more attention at the Expo than any other province or municipality. Seven big aviation projects are in the works in Tianjin’s Binhai New Area, including the Airbus A320 Assembly line, a helicopter industry base, special vehicle production base and wing assembly project.
Meanwhile, Laurence Barron, president of Airbus China, has praised the quality of the Airbus A320, assembled by Tianjin’s final assembly line, and Eurocopter China CEO Bruno Boulnois has also expressed interest in cooperating with Tianjin.
According to the Tianjin Development and Reform Commission, in the first seven months of this year, the aerospace industry accounted for 7.5 billion yuan of Tianjin’s revenue, up 20-fold from the same period last year. It has become the city’s fastest growing emerging industry.
Shanghai
In Shanghai, the municipal government has designated the aviation Industry as an economic pillar industry. A national support base for the civil aviation industry will be built in Shanghai Lingang Development Zone to supply Chinese-made engines for Chinese-made aircraft.
Beijing
Beijing has plans to become an aviation city of the 21st century. On July 29, the state-owned Aviation Industry Corp of China (AVIC), the country's leading aviation manufacturer, began construction of an aviation industrial park in Beijing. The 1.6-million square meter industrial park will be built in two phases, the first of which will involve an investment of 10 billion yuan. AVIC has also started building an aeroengine industry base, with a planned investment of 9 billion yuan.
Elsewhere, in Nanchang, Xi’an and Shenyang, there are plans to speed up the development of new air industrial parks. Zhang Liwei, director of the Planning & Development Bureau at Xi’an’s National Aviation Hi-tech Industrial Base, said, “The Xi’an Aviation SME Industrial Park, which is to be built in our base, will be the biggest gathering place for Chinese private aviation enterprises.”
Competition behind the new industry layout
Competition between different interest groups has been an underlying cause of the current wave of restructuring in the aviation industry.
From the 1950s to the 1980s, the Chinese government set up aviation enterprises in Shenyang, Xi’an, Chengdu, Guizhou, Nanchang and Shanghai to meet defense needs. This industry layout stayed intact till the beginning of this century, when China started its ARJ21 project and large aircraft program. Lots of other provinces took the opportunity to speed up their development of high-tech aviation industries to help upgrade the industrial structure and pull up the GDP.
Cao Yunchun, a professor at the Civil Aviation University of China, said, “This new wave of building the aviation city reflects the eagerness of local governments to facilitate an industry upgrade.”
Overall, the availability of aviation projects is very limited, and there are not enough to be distributed to so many different interest groups. According to a survey by the Economic Information Daily, there are three main competing groups: the central government, the provincial or municipal governments and foreign aviation giants aiming at the Chinese market.
Two negative tendencies
Based on results from a survey administered by the Economic Information Daily, the Chinese government faces two potential problems during the process of creating a new blueprint for the aviation industry. The first is to avoid redundant construction and overcapacity. The second is to prevent foreign aviation giants from gaining additional profit due to competition among Chinese provinces.
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