Will China's Plans for Large Airliner Take Off?

The first made-in-Tianjin A-320 - a single-aisle, 150-seat aircraft popular with Chinese airlines - is expected to roll off the assembly line as early as next year.


TIANJIN, China - AT THE sprawling site of the first Airbus aircraft assembly plant outside Europe, a bright red banner and two cheerless billboards offer the only clues of what is to come.

'Focus on quality, reduce costs and ensure that the first A-320 plane is assembled on time,' exhorts the banner, hung on a fence encircling the construction site at north-eastern Tianjin's airport industrial park.

Those modest goals belie the true significance of the 2 billion yuan (S$392 million) factory.

When completed by year-end, it will mark a new milestone in China's growing sophistication as a global manufacturer, graduating from the making of toys and shoes to passenger jets.

The first made-in-Tianjin A-320 - a single-aisle, 150-seat aircraft popular with Chinese airlines - is expected to roll off the assembly line as early as next year.

By 2011, four such aircraft are expected to be built every month.

And China will move nearer to its long-held dream of building its own large passenger plane.

It has been making aircraft component parts for industry giants Boeing and Airbus for years.

But the Airbus plant will finally offer Chinese engineers a complete factory-floor view of how the entire complex operation comes together.

Beijing declared last month that it wants to design and build a homegrown passenger jet, possibly by 2020, which can compete with Boeing and Airbus.

'Developing its own large aircraft is a priority of China's longer-term scientific and technological development strategy,' the official Xinhua news agency declared last month. 'The programme is a major strategic decision of the central government, and a long-cherished aspiration of the Chinese people.'

The details remain sketchy, though media reports and analysts suggest that China would first aim to build a single-aisle, 150-seat passenger jet - the same cabin layout as an A-320 - before attempting something larger.

Beijing is expected to invest an initial 50 billion yuan to 60 billion yuan in the project, which includes a parallel plan to develop a military passenger jet.

After sucking in manufacturing jobs worldwide, is China poised to eat Airbus and Boeing's lunch next?

Not just yet, say analysts and industry players, who have greeted the news with a mixture of diplomacy and scepticism.

Mr David Carcaillet, a director of project marketing at Airbus who is based at its Toulouse headquarters in France, said it is one thing for China to say it wants to build its own aircraft, and another to actually do it.

Speaking to The Straits Times while in Hong Kong recently, he cited the Japanese as an example.

'They have tried to set up their own aviation industry since the 1950s and are still not getting anywhere,' he said.

'It is still too early to see how significant a challenge China could be to the dominant players of Airbus and Boeing, but China would need to raise its technical expertise and knowledge by a fair amount in order to have any chance of succeeding.'

Analysts said that learning how to build a modern passenger plane may just be the easy part for China.

The tougher challenge is likely to be in marketing the new aircraft and convincing potential buyers that China is able to provide the same level of service support that airlines worldwide expect from Boeing and Airbus.

'The sheer number of capabilities that must be mastered, combined with the need for commercial profitability, generally means that a civilian aviation sector is more demanding in time, intellectual capital and resources than developing a space programme,' private intelligence consultancy Stratfor said in a recent report.

It reckoned that China will not be a serious threat to Boeing and Airbus for the next 20 years at least, though it acknowledged that Beijing had several major advantages going its way.

For one, it is now flush with cash and eager to channel the money towards strategic sectors like aviation.

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