Chinese Aviation Industry

Lion said:

One of the worst corruption in the world? Sure there is corruption everywhere. But to try paint china is highly corrupted is overdone. Some how if china is over corrupted, amazingly this country is can top 2 in world economics in less than 30years and snowball a foreign reserve of 3 trillion.

I agree civil infrastructure is abit too over pamper by CCP given high prioritise for budget. If you happen to work in china. You will understand the workforce heavily emphasise in cost saving. You see the workforce do not have the kind of luxury tht western counterparts has.

As for military and aircraft industries, it is long known its a neglected sector of CCP. They do not have the fund and priority as compare to infrastructure. It was only in the last 5 yrs, this trend started to change abit better. The military had always survive under frugal practice.

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Vini_Vidi_Vici said:

By the way, Chinese GDP mostly come from overseas, made up mostly of cheap low-end goods. Even last year in 2011, 40% of all the Chinese GDP come from export of goods and services (Quotted from Trading Economics, pretty credible source). Although China is shifting towards innovations and R&D, the true force behind its growth is still Western spending and purchases. China at the time simply had too many poor population that are ideal cheap labors. It was sheer scale and brute force that made China grow so quickly. It's the West that made China rich, not the other way around.

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Vini_Vidi_Vici said:

By the way, Chinese GDP mostly come from overseas, made up mostly of cheap low-end goods. Even last year in 2011, 40% of all the Chinese GDP come from export of goods and services (Quotted from Trading Economics, pretty credible source). Although China is shifting towards innovations and R&D, the true force behind its growth is still Western spending and purchases. China at the time simply had too many poor population that are ideal cheap labors. It was sheer scale and brute force that made China grow so quickly. It's the West that made China rich, not the other way around.

As for cost saving, you're comparing apples to oranges. Cost cutting measures only exist in private sectors, made up of mostly private small factories that are mostly contractors, making cheap goods for Western markets. Those family owned and operated small companies have no choice because their profit margin is so low. I remember Bo Xilai once said a famous quote, that "China had to make 800 million jeans to buy a Boeing 747".

But in here we're talking about large crown owned conglomerates, especially those aeronautical sectors, either 100% or close to 100% government owned corporations. My father had worked with those corporations before, he was amazed how easily funds are obtained in China. They never had money problem, a phone call always solves fund problems. In fact, often at the end of the fiscal year, they had to host extra company/department funded banquets and vacations to burn up the leftover funds. To a Westerner, that's an eye-opener.

I'm sure there probably is a lot less corruption problem in this sector, rather just inefficient usages, due to the nature of the workforce, mostly untainted academics that have better moral values and self-discipline.

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jobjed said:

According to the CIA factbook (world's most capable intelligence agency), China's exports were 1.9 trillion USD whilst their GDP was 7 trillion USD, that gives a percentage of 27. I don't see how it jumped to 40% but ok... Anyways, China did make some Western countries rich by their appetite for natural mineral ores. Australia had a budget surplus for nearly a decade of Howard administration rule which coincided with China's 21st century rise.

This is getting off-topic though, should be discussed in the economics thread.

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Quickie said:

Another thing is about 30 to 40 percent of exports is to Europe and U.S. , so the 27% becomes about 10%. And then one still have to minus off the cost of the import content in that 10% export figure.

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During China's Prime Minister Wen Jiabao's visit to Brazil for the Rio+20 Conference, in a signing ceremony witnessed by leaders from both nations, Embraer S.A. and Aviation Industry Corporation of China (AVIC) signed an agreement to build Embraer's Legacy 600/650 executive jets in China, using the infrastructure, financial resources and workforce of their joint venture Harbin Embraer Aircraft Industry Co., Ltd. (HEAI), which started operations in 2002.

The agreement is based on the understanding of both parties about the potential demand of China's flourishing executive aviation market, and their wish to extend their decade-long strategic partnership. HEAI's first executive jet is expected to be delivered by the end of 2013.

"Today's announcement marks another milestone in the history of Embraer's long term commitment to China and of Brazil-Sino bilateral relations. This new phase of AVIC-Embraer partnership corroborates what has been referred to by state leaders of both countries as 'a model of South-South cooperation'," said Frederico Fleury Curado, Embraer President and CEO.

"The achievement of Sino-Brazil cooperation in the field of aviation is a hard-won, indispensable of the joint efforts from state leaders and the industry players of both countries. The cooperation on executive jets manufacturing, as the continuation of what the two parties have attained via the joint venture, fits in the strategic development of all parties. It is undoubtedly a win-win strategic international cooperation. As the leader of China's aviation industry, AVIC will seize the opportunity to develop a platform building executive jets that will meet the demand of the global and China markets, and ultimately assist China's executive aviation industry progressing into a new stage," said Tan Ruisong, President of Aviation Industry Corporation of China.

Embraer's presence in China dates back to 2000, when its Beijing Representative Office was established. In June 2010, in light of its increasing customer base, the Company set up its first wholly owned subsidiary in China, the Embraer (China) Aircraft Technical Services Co., Ltd., focusing on after sale support.

To date, Embraer has 154 firm orders from China market, with 116 aircraft already delivered. Embraer accounts for around 78% of China's regional aviation market and is gaining strength in its executive segment with 18 firm orders for executive jets in the year 2011. The cooperation with AVIC on Legacy 600/650 program further consolidates Embraer's presence in China's executive aviation market.

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Construction on the Kunming Changshui International Airport, a hub airport in southwest China's Yunnan province, was completed on Tuesday, with the airport expected to go into operation on Thursday.

The airport, built with a total investment of 23 billion yuan (US$3.6 billion) will act as an aviation hub for southeast Asia, the Middle East and Europe, according to the airport's construction headquarters.

Passenger flight service in and out of the provincial capital of Kunming will be switched from the 90-year-old Wujiaba International Airport to the Changshui International Airport on Thursday.

The airport, located 24.5 km away from downtown Kunming, will have an initial annual throughput of 38 million passengers and 950,000 tonnes of cargo. It will be able to handle 303,000 flights per year.

The airport's long-term annual throughput will be 65 million passengers and 2.3 million tonnes of cargo, according to the headquarters.

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escobar said:

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Wu Xuyong, vice president of Civil Aviation Flight University of China (CAFUC), said that CAFUC is now world's largest flight training institution. It is a world famous school with 240,000 flight training hours annually, while the world's second largest flight training institution only has some two thirds training hours compared to CAFUC.

There are over 100 aircraft performing flight training every day. Compared to domestic transportation enterprises, it has the highest flight hours other than Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines and Shenzhen Airlines.

CAFUC also develops and delivers world-class training quality. Students are recruited directly by airlines after graduation from CAFUC. In 2011, CAFUC enrolled 1,500 student pilots, after some of whom being eliminated, about 1,000 will graduate from CAFUC under domestic training program, and 300 to 400 of them will be sent abroad for flight training due to the saturated training capacity in CAFUC.

At present, approximately 80% of Chinese captains graduated from CAFUC. The number was even higher before 2004, up to 90%. Today, due to big shortage of pilots, 3,000 pilots are needed annually. Currently, CAFUC only delivers 1,000 pilots per year while another 2,000 pilots are provided through overseas training.

Airspace Issues Restrict Flight Training Program

CAFUC established the "6321" project for the "12th Five-Year Plan" period. The figure "6" means CAFUC will increase two new flight branches in Suining and Langzhong on the basis of the existing 4 flight branches in Mianyang, Luoyang, Guanghan and Xinjin. So there will be 6 flight training institutions.

Nevertheless, the capacity of CAFUC still cannot meet the growing pilot demand of China's civil aviation, which is a situation that cannot be avoided. Wu also admitted that it is not an easy project to establish a flight training school in China. You first need a network of airspace.

Apart from restrictions from civil aviation and military aviation, you need at least two airports with a distance about 200 km from each other to build a training network. However, areas in accordance with those requirements are not easy to find. That's why it is so hard for a lot of private enterprises or institutions to start their own flight training.

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