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Chinese Wings By 2020?

There has been a lot of reaction to the announcement that China plans to enter the passenger jet business in a big way – with an initial investment of US$10 billion – and to stop lining the pockets of Boeing and Airbus by 2020.

This is not the first time China has come up with a Big Plan, but there is some debate about the motivations and capabilities. Is it a negotiating ploy? Is the technology really available? Can the supply chain support such a venture? Will the US and EU allow for export of key technologies? Why don’t they just buy into Airbus (which has been having its own challenges)? Etc. etc.

China Law Blog [1]takes the negotiation line: “China will not be a force in commercial airplanes by 2020 or even 2030. In the meantime though, it might be a clever way to angle for discounts.”

Silicon Hutong [2]suggests that little in the way of innovation is needed, as there have been no major changes to the planes we fly in for years, and as most components are already outsourced by Boeing and Airbus to companies that could supply anyone.

The debate will continue, but once again China has shown that it has the power to shake world markets, and rudely awake the slumbering giants – especially where strategic industries are at stake. Whether they succeed in 2020 or not – or whether Boeing and Airbus try to make the plan unnecessary and uneconomic by reducing prices and sending more production to China – it seems that China has an agenda that will be worth watching.

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