IWS Documented News INTERNATIONAL

IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________

RAND

READY FOR TAKEOFF: CHINA's ADVANCING AEROSPACE INDUSTRY [24 March 2011]

http://www.rand.org/pubs/monographs/MG1100.html

or

http://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG1100.pdf

[full-text, 164 pages]

Summary

http://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG1100.sum.pdf

This monograph assesses China's aerospace capabilities and the extent to which China's participation in commercial aerospace markets and supply chains is contributing to the improvement of those capabilities. It examines China's commercial aviation manufacturing capabilities, its commercial and military capabilities in space, Chinese government efforts to encourage foreign participation in the development of China's aerospace industry, transfers of foreign aerospace technology to China, the extent to which U.S. and other foreign aerospace firms depend on supplies from China, and the implications of these issues for U.S. security interests.

China's aerospace industry has advanced at an impressive rate over the past decade, partly due to the increasing participation of its aerospace industry in the global commercial aerospace market and the supply chains of the world's leading aerospace firms. China's current ability to meet demand with indigenous aircraft is limited, however, and much of the demand will be filled by imported aircraft. China's space capabilities have improved rapidly, on the other hand, and it has developed and deployed an increasingly wide range of satellites. China's growing civilian aerospace capabilities are unquestionably contributing to the development of its military aerospace capabilities, but whether the United States could significantly improve its security through alterations of its policy toward civil aerospace cooperation with China without having a significant negative effect on its own economic interests is unclear.

Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii

ChAPTer One

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Structure of the Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ChAPTer TwO

China’s Commercial Aircraft Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Current Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Projections of China’s Future Commercial Passenger Aircraft Market . . . . . 12

Factors Other Than GDP Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Domestic Versus International Traffic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ChAPTer Three

China’s Current Commercial Aircraft Production . . . . . . . . . . . . . . . . . . . . . . . . 25

Commercial Passenger Aircraft. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Domestic Designs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Foreign Designs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Helicopters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Fixed-Wing General Aviation Aircraft. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ChAPTer FOur

The role of Foreign Firms in the Development of China’s 

Commercial Aviation Manufacturing Industry. . . . . . . . . . . . . . . . . . . . . . . 35

Chinese Government Policies Toward Foreign Aviation 

Manufacturing Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Joint Ventures and Cooperative R&D Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

U.S. Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Non-U.S. Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Extent to Which China-Based Production Supplies U.S. Aerospace 

Firms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

U.S. Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Non-U.S. Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Other Sources of Western Aerospace Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

ChAPTer FIve

China’s Space Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Launch Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Communications Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Weather Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Civilian Earth-Observation Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Military Imagery Reconnaissance Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Position, Navigation, and Timing Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Other Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

ChAPTer SIx

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

The Rate at Which China’s Aerospace Sector Has Developed. . . . . . . . . . . . . 115

Future Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Potential to Contribute to China’s Military Capabilities. . . . . . . . . . . . . . . . . . . 120

Implications for U.S. Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Figures

2.1. RPK Flown by Major Airlines of Brazil, 

China, Japan, Germany, and the United States in 2007. . . . . . . . . 6

2.2. RPK Distribution of Chinese Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2.3. Domestic RPK Flown by Major U.S., Japanese, German, 

and Chinese Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2.4. International RPK Flown by Major U.S., Japanese, German,

and Chinese Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2.5. Total RPK Flown by Major U.S., Japanese, German, and

Chinese Airlines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2.6. Boeing’s Market Outlook for 2010–2029. . . . . . . . . . . . . . . . . . . . . . . . . 13

2.7. Normalized RPK Flown by Major Carriers

in Each Country in 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2.8. Projections of the Growth of the Chinese Commercial Fleet

Based on Alternative RPK/GDP Ratios and Average GDP

Growth Rates Compared with Boeing’s Projection. . . . . . . . . . . . . . 15

2.9. Spatial Pattern of Domestic Air Passenger Flows in 2005 . . . . . . 16

2.10. High-Speed Rail Network in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

2.11. Travel Time by PDL from Beijing to Selected Cities . . . . . . . . . . . 20

2.12. International and Domestic RPK for Five Nations 

in 2007  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

4.1. U.S. Aerospace Imports, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

4.2. U.S. Aerospace Imports, 2005–2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

4.3. U.S. Aerospace Exports, 2005–2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Tables

4.1. International Partners in the ARJ21 Program. . . . . . . . . . . . . . . . . . . . 45

4.2. Major International Partners in the C919 Program . . . . . . . . . . . . 46

4.3. Current Boeing Work Packages and Procurement at 

Chinese-Owned Enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

4.4. Current Airbus Work Packages and Procurement at 

Chinese-Owned Enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

________________________________________________________________________

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
Telephone: (607) 255-2703                
Fax: (607) 255-9641                       
E-mail: smb6@cornell.edu                  
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