Is China’s State-Owned Aircraft Manufacturing Company A Threat to Boeing?

You may wear Chinese-made shirts and not even notice, so will you someday be flying aboard a Chinese-made passenger plane?

 

The potential threat of China’s commercial aviation sector to American manufacturing – and especially to Boeing — was one focus Thursday of a hearing of the Senate Commerce Committee’s Subcommittee on Aviation Operations, Safety, and Security.

 

Displaying a photo of a C919 made by China’s state-owned aircraft company, COMAC, Sen. Mark S. Kirk, R- Ill., told the subcommittee, “This is a competitor to the [Boeing] 737…. We want to make sure that just as this [C919] aircraft hits the market as we expect in 2018, that we have an Export-Import Bank to finance sales of U.S. aircraft overseas.”

 

The charter for the Export-Import Bank expires next month and it faces opposition from fiscal conservatives, especially among House Republicans.

 

Subcommittee chair Sen. Maria Cantwell, D- Wash., said “because of the massive resources required to develop, produce, and market commercial airplanes, when we talk about aviation, we are often not talking about companies, as far as competition, but sometimes talking about actual countries.”

China and Russia are working “to develop a wide-body plane intended to compete on a global scale,” she said.

The ranking Republican on the subcommittee Sen. Kelly Ayotte of New Hampshire said “if their milk is an indication, I don’t want to fly in a Chinese plane”—a reference to Chinese scandals over adulterated milk and infant formula.

Offering a more guarded view of potential competition from China was economist Keith Crane, director of the Environment, Energy, and Economic Development Program at the RAND Corporation.

Crane said in his testimony that “by the time COMAC hits full production, the C919 will be technologically outdated compared to Airbus’s and Boeing’s new models, the A320neo and 737 Max, respectively.”

 

Most aviation experts, he said, believe that COMAC “will not truly be able to break into the international commercial aircraft market until it manufactures its next aircraft, the C929, following the C919 and quite possibly, not even then.”

To develop the C929, COMAC will Chinese government subsidies for “a relatively long period of time.”

But Crane added that one market where China is likely to be more successful is in smaller planes for general aviation.

 

He noted that a Chinese state-owned enterprise has acquired Cirrus, a U.S. manufacturer, and has signed a joint venture agreement with Cessna to assemble the Cessna Citation model in China.

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