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China

CHINA: THREAT TO AVIATION OR OPPORTUNITY?
By TC FREEMAN


     Simply saying the name of the country, China, brings up a storm of opinions and comments. While the trade deficit and manipulation of the Yen is a major concern, the fact is the United States has something China wants, our creativity and expertise in the aviation industry. On the one hand “business China,” as in the unique intertwining of business and government, is tired of being the footnote of manufacturing. It is no secret that China has made strong U.S. brands (and other countries) a lot of money. For example, take the IPad, designed, created and branded in the U.S., manufactured in China. Who make the lion’s share of money from this deal? Yep, Apple. As the powerful Chinese manufacturing sector wrestles with this issue, the realization is obvious that they need the U.S. to fulfill their crazy ambitious growth plan. This growth plan isn’t a growth for the sake of it, but in many ways a necessity to support the huge population of a country whose national bird is the Sky Crane (joke intended).  The underlying question prevails, “China, opportunity or threat?”

     The growth of the Chinese aviation sector is nothing short of mind blowing. Let me share with you some facts from the very insightful book, “China Airborne,” by James Fallows. If you haven’t checked this book out I highly recommend it due to some of the facts Fallows points out such as:

Aviation is listed as one of China’s “Seven Strategic Initiatives” for growth.

* China is investing “$230 billion in public investment, a 50% increase over the last five year plan (2006-2011).”

* China is spending “between five to ten times as much as the Federal Aviation Administration (FAA) for capital improvements and airport construction over the same period…”

* China’s commercial air fleet consists of “2,600 airplanes as of 2010, roughly half as many as America’s for a population four times as large.” 

* China has a commercial aircraft buying target of “4,500 over the next five years that would represent about half of the aircraft sold anywhere in the world.”

China is making up for lost time with respect to airport construction, “working on 150 new airports mainly in parts of the country that have never previously had air service.” This boon is not limited to commercial aviation. The expansion of the wealthy class has created a new population that has discovered the benefits of corporate and recreational flying. Cirrus aircraft has firm roots in the country and Doug Hempstead of Allegro Aircraft mentioned in our podcast interview that they have secured 30 orders per year from China. 

     There are a couple of ways to look at China, opportunity or threat? Personally, I see much more opportunity in China and the entire world market. My lesser, but important, concerns center around the trade imbalance, manipulation of the Yen, intellectual property/patent rights and foreign investment in U.S. companies.  Maintaining majority ownership of U.S. companies is important as China positions itself by investing more heavily in the established U.S. industry.  
     
     As with change and growth there are those that want to “circle the wagons” by shutting out the rest of the world to maintain some perceived perception of control. I see a wealth of opportunity in being a major player on the world market while protecting and positioning our country with the best resource available, American ingenuity and entrepreneurism. 

 
Reference: Fallows, James. China Airborne. Pantheon, 2012. Print.    

About the author:

TC Freemanhas been flying since he was a teenager and is now an aviation speaker and author. Being employed as an Aviation Safety Specialist for state government, he has a passion for spreading the thrill of flying just for the fun of it via the website, www.WingsOfun.com.


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