Observations on the Development of China’s Aviation Industry

Airpower strategy and the aviation industry have advanced together. Observations on the evolution of the PLAAF’s strategic objectives and the reform of the aviation industry since the 1980s suggest that China has man­aged to keep them up to speed. After Den Xiaoping put forward the guideline of “building an armed forces with quantity and quality” in 1985, the PLAAF started to study its strategic role. After the Gulf War in 1991, the PLA real­ized that a modernized air force is the key to victory in battle, and thus estab­lished CAIC. In 1999, China restructured AVIC I and AVIC II. In November of the same year, the PLAAF’s commander outlined on the 50th anniversary of the PLA the idea of shifting the air force from “territorial air defense” to “both offense and defense.”17 In 2004 and 2007, the PLAAF Party Congress passed resolutions on building a “strategic air force” and “an air force that matches the status of a great power.”18 In 2008, China once again restructured AVIC. It is believed that these developments are not coincidental. Instead, they are calcu­lated measures adopted after comprehensive considerations on the two major objectives of strengthening airpower and developing the aviation industry.

The aviation industry has been selected as a key development project. The Outline of the National Program for the Medium – and Long-Term Development of Defense-Related Science, Technology and Industry (2006-2020), released by COSTIND in 2006, stipulates clearly that by 2020, defense-related science and technology must be able to meet basically the needs of the independent R&D, as well as the manufacture and information-based development of mod­ern weapons and equipment.19 According to the Outline, China will step up research on basic aviation science, and develop advanced aviation technology. Moreover, the development of the aviation industry should be unaffected by the government’s macroeconomic control measures. On the whole, the PLA’s effort to develop new-type fighter-bombers, AEW&C aircraft, air-launched missiles, aircraft engines, and large passenger aircraft, to which the govern­ment has committed significant resources, are all concrete manifestations of the Outline.

However, the biggest problem of China’s aviation industry is that its ability of independent innovation and invention needs to be enhanced, since Chinese-made fighter aircraft, guided missiles, engines, and other systems are more or less the results of suspected piracy and some are even exact reproduc­tions of foreign inventions. If China is unable to acquire advanced products from foreign countries, the development of its aviation industry will be limited. Furthermore, internal R&D expenditure by China’s aircraft manufacturing industry in 2007 amounted to merely RMB 3,722.68 million,20 far behind that of its European and American counterparts. Inadequate investment in R&D is another factor constraining the development of China’s aviation industry.

Foreign assistance is needed if China is to develop advanced technology. Though it has built up some measure of strength, China’s aviation industry still lags behind advanced countries to a great extent. According to the Stock­holm International Peace Research Institute (SIPRI) and the U. S. Department of State, China belongs to the “third-tier” states in terms of military-industrial strength. The strength of the military industry in Russia, which ranks no. 1 in the second-tier states, is about one-sixth of the military-industrial strength of the United States.21 For a long time, China has used procurement to boost its own technological capabilities. Nonetheless, in the face of U. S. high-tech export controls, the European Union arms embargo, and Russia’s growing wariness of Chinese piracy, China’s attempt to acquire high-end technologies from foreign countries has run into a severe challenge.

Recent measures adopted by China’s aviation industry are worthy of attention. In December 2009, AVIC XAC acquired a 90 percent stake in Aus­tria’s Future Advanced Composite Component (FACC).22 FACC is a company specializing in the development and production of aviation composite mate – rials.23 The acquisition was the first of its kind that China had made in a for­eign aviation industry. AVIC will use FACC as an R&D and test center for avi­ation composite materials. Relevant technologies will be transferred to China for production, assisting considerably the R&D and manufacture of advanced composite materials in China. AVIC and ACAE have devoted about 4,000 peo­ple to research and develop the C919 and its engine. To drive forward follow-up works in each stage, both companies have launched a global talent recruitment program. The management personnel AVIC hired initially in August 2009 have been appointed senior managers at five subsidiaries. AVIC’s goal is to recruit 3,000 people of various talents in 5 to 8 years. This indicates that lack of tal­ent has constrained China’s ability to make breakthroughs in key technologies. Therefore, China wishes to acquire foreign technology through the recruit­ment of international specialists.24

Blazing a path of development with military and civilian integration. PRC research suggests that the United States has created a matchless military by harnessing the infinite power of the civilian sector and that the separated civil – military research systems in China are one of the factors causing China to trail behind. Hu Jintao stressed at the 17th Party Congress that China would “estab­lish sound systems of weapons and equipment research and manufacture that integrate military with civilian purposes and combine military efforts with civilian support, and blaze a path of development with Chinese characteristics featuring military and civilian integration.”25 Take the development of China’s aviation industry, for instance. The strategy adopted to develop large civil pas­senger aircraft and large military transport aircraft is based on the principle of “1 project, 2 models, civil-military coordination, and series development.” Technologies acquired from international cooperation—such as structural designs for airframes, composite materials, aircraft engines, and automatic control systems—can be used in the R&D and manufacture of military aircraft in China, making it difficult for foreign countries to implement effective con­trols. In Western countries, most AEW&C, electronic warfare, and command and control aircraft use civil passenger aircraft as the basic platform to build upon. The C919 also has the same potential. China will be able to produce a synergistic effect for the development of its military power if it can promote the “civil-military integration” strategy effectively.

Export and domestic demand: the prospects for China’s aviation industry. There is no doubt that the primary mission of China’s aviation industry is to support the development of the PLA. With regard to the export market, China has found a niche in the arms markets of some Asian and African coun­tries through the sales of the J-7, Q-5 and K-8. If the production agreement between China and Pakistan on 150 JF-17s is taken into account, China will become the world’s third-largest exporter of military aircraft, behind only the United States and Russia.26 Two Pakistan JF—17 aircraft were displayed for the first time at the 2010 Farnborough International Air Show in London. During the air show, China and Pakistan discussed matters relating to possibly export­ing JF—17 fighters to eight countries: Congo, Egypt, Nigeria, the Philippines, Sri Lanka, Sudan, Turkey, and Venezuela. In addition, Pakistan, Iran, North Korea, and others have expressed high levels of interest in the Chinese-made

J—10. If China can avoid Russian control over engine production, the global export of Chinese-made military aircraft would seem to have a bright future.

Airbus predicted in 2006 that China would need to add more than 2,800 passenger aircraft and freighters in the next 20 years. Moreover, an AVIC market forecast for the period up to 2028, released at the Beijing Air Show in 2009, pre­dicts that China will need 2,922 large and 874 short-to-medium-range aircraft.27 From these data, it seems that China’s domestic market will be able to shore up the sales of the C919 and its follow-up models. However, to form a complete civil aviation industry, China will have to face up to the competition from Boeing and Airbus, and the key is whether China can obtain Federal Aviation Administra­tion and European Aviation Safety Agency airworthiness certifications. If China fails to get the certifications, then large civil aircraft made by China could only fly in the sky in China and in a few other countries.

Conclusion

Since its founding in 1949, the People’s Republic of China has weathered many troubles at home and from abroad. Driven by the goal of a modern mili­tary, China has listed the development of its aviation industry as a key project from the beginning. After 60 years of development and reform, the aviation industry in China, though growing slowly with limited transformation, has achieved some results. For a long time, China has sought to enhance the stan­dards of its aviation industry by copying finished products that are acquired from abroad or through OEM production. Initial results generated from this approach include the key technologies that China lacked but has now learned, and the improvement of foreign products with some innovations. In general, China already has a considerable capacity for indigenous production. Once reaching a certain level, China’s indigenous production capacity will begin to transform quantitatively and qualitatively, ultimately allowing China to achieve its aspiration toward independent innovation and invention. China’s aviation industry still faces many unsolved problems and lags far behind advanced countries. Despite that, in time, the standards of China’s aviation industry may progress to an extent unimaginable to the outside world.