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China To Build Its Own Large Jetliner
Hugh Pickens writes "China's domestic airlines will need to buy an estimated 4,330 new aircraft valued at $480 billion over the next two decades to meet demand in commercial aviation. Now the LA Times reports that the Commercial Aircraft Corp. of China expects to begin producing its 156-seat C919 by 2016, competing with the Boeing 737 and Airbus A320. China has staked billions of dollars and national pride on the effort but what may surprise some Americans worried about slipping US competitiveness is that some well-known US companies are aiding China, putting US and European suppliers in a tough spot: Be willing to hand over advanced technology to Chinese firms that could one day be rivals or miss out on what's likely to be the biggest aviation bonanza of the next half a century. 'If they launch a commercial aviation industry, you've got to be part of it,' says Roger Seager, GE Aviation's vice president and general manager for China, whose company has garnered contracts worth about $6 billion for the C919. 'You can't take a pass and come back in 10 years.'"
Oh yeah, "A capitalist will sell you the rope you will hang him with if he can make profit on it" Lenin
How we know is more important than what we know.
I remember learning in school that West Africans would trade gold for salt, pound for pound, with people from Northern Africa and abroad because they didn't know how to make their own salt and they needed it to survive. It always made me wonder why they didn't just pay gold, even if it was an incredible amount, for the knowledge to secure their own salt. Producing salt wasn't all that difficult, if I remember correctly, the salt traders would just evaporate seawater in little holes in the ground and scrap up the leftovers.
My page.
I once read how German and Japanese companies were required to partner with Chinese companies in order to bid on high-speed rail contracts. Once the Chinese "partners" had the designs, they severed their partnerships and are now building all of their rail systems in house. So it was basically a scam to gain access to technology, and the promises of long-term contracts never materialized. I suspect something similar will happen this time around with aerospace. I doubt that the Aerospace companies are any more savvy on protecting their technology than the rail companies.
This is marked insightful?
This is the same shit uttered about the Japanese in the 1960s and early 70s before they kicked everyone's ass in the 80s.
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BMO
You know, over the past 6+ years I have brought my position out on multiple occasions only to have my position labelled "protectionist" and discarded. But we have a problem in the U.S. We are exporting money that doesn't return. Some call it trade deficit. Some call it exporting jobs. Others call it outsourcing. Whatever you call it, big business is sending out a lot of money that never returns to the U.S. What's more, in order to do that, the foreign workers have to be educated in our technologies in order to replicate what we have done.
So we lost manufacturing and technology. All we have remaining is "intellectual property" which is really a thing that is not universally agreed upon. The things that made the US great aren't here any longer and while many of us were complaining about it leaving, government paid off by big business persisted in letting it happen.
Now were are we?
Maybe it is time for protectionism. Maybe it's too late for it to do any good. Government needs to think about the people, not the businesses. Business is demonstrably abusive of people when allowed -- it's why we have [outdated] labor laws at all. They are unashamed of it. It's past time our government did their job instead of the will of the highest bidders.
China's turboprops in the modern era are all Russian designs. The ARJ21 is a ripoff of the MD90 http://en.wikipedia.org/wiki/Comac_ARJ21. The C919 is an Airbus 320 20 years too late. There is no innovation here, just borrowing. That's OK though, right?
The novel by the great, late Michael Crichton, explains all of this in enjoyable detail....
If he's the Walrus then can I be a penguin please?
I'm not sure what your point is, but last I checked, the Chinese are doing pretty good in aerospace, are aiming for the moon, and well, are motivated to get shit right when it comes to aerospace.
I think the Chinese will pull it off. Indeed, I hope they do, to light a fire under the complacent asses currently inhabiting my country - the US.
Your post positively reeks of such complacency and whistling past the graveyard.
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BMO
The C919 is an Airbus 320 20 years too late
which was itself a 737, 20 years too late. Boeing are still selling hundreds of 737s every year. Airbus are selling plenty of 320s, many of them to Chinese airlines. There's a market for this sort of aircraft.
There is no innovation here, just borrowing. That's OK though, right?
It's business. It's apparently legal, or not obviously illegal enough for any reprecussions, and it makes money. so yes, that's okay.
It's one thing to buy cheap Chinese made consumer electronics goods, but would you really want to risk your life in an aircraft? They cant even get products specifically destined for children right without someone unscrupulous substituting something inferior or deadly (lead paint, melamine). Unfortunately as a country they have a long way to go to rebuild their reputation.
Many of the same things were said when the Japanese started exporting electronics and cars to the U.S. It is a fatal mistake by many Americans to assume that lack of quality in the past guarantees lack of quality in the future, or more to the point, that their aerospace products will be manufactured in the same factory as goods destined for Walmart. They have already successfully launched satellites and people into space, indicating attention to engineering detail when it matters. Nobody here seems to notice or care that they're quickly and quietly becoming the leaders in producing and developing renewable energy tech. This outright dismissal is going to be the eventual downfall of our lazy American asses. I hope our politicians don't dimiss this as easily as you do (and probably many other posters).
"The only normal people are the ones you don't know very well."
Chinese have already (successfully) copied fighter planes. Take a look at J-7 (Mig-21), J-8 (Su-15), J-10(Eurofighter), J-11 (Su-27, Su-33). So only thing that is actually new - is that they are making* a new, civilian airplane.
* When I say making, I think about using blatant copy of some existing design
So much of the US aerospace production is classified as "military" that it's a real problem for companies trying to export equipment.
The US regulators should become aware that it was progress, not secrecy, that kept the US ahead of the others during the Cold War. Now that the Soviet Union is no more, military technology does not have the same pressure as before to keep developing new stuff, so they try to keep the same old secrets forever.
Not to mention the Koreans in the 1980s and the Taiwanese in the 1990s and the Chinese in the 2000s. Next up: we laugh at the Vietnamese and the Malaysians in the 2010s, the Thais and the Indians in the 2020s and the ...
Do you see what's happening? All these nations are steadily, determinedly industrializing and marching past us on and up the value chain, while we make monkey noises and throw feces.
Over the years I have gradually begun to realize that China developing advanced technology is a good thing for the world as a whole.
First of all, as China has developed their standards of living and the quality of their products has increased enormously. It is true that occasionally they cut the wrong corner and you end up with lead contaminated products. But the overwhelming trend is towards higher and higher quality, like the Japanese economy was in the 1960s.
Second, China is now growing past the point of merely copying (or pirating) other nation's technology and is starting to actually create things that were never seen before. That benefits the U.S. as much as it benefits China.
One concrete example I know of : the smokeless cigarettes that deliver nicotine without the carcinogens were invented by a Chinese scientist. These things are a major advance, and if developed fully could eliminate most deaths from Tobacco usage.
In the long run, everyone in the world will benefit once China converts even a fraction of it's billion person population into scientists, engineers, and artists.
Um, yeah, they did actually produce planes, they just never were all that competitive with Airbus and Boeing.
Monstar L
Not even the Brazilian Embraers,
It's the 717 clone coming out of China that does, as well as the notion that HAL (Hindustan Aeronautics LTD, India) might get the same idea.
Now quality in passenger aircraft is a major concern for me and any other frequent traveller. Airbus and Boeing have proven track records and are able to get to the bottom of problems in short order. I don't have that kind of confidence in China, especially as face comes into play. It may become, to the leader du jour that maintaining the Chinese aircraft industry is more important then lives. Never underestimate the kind of stupid things that will be done to maintain face.
Now I've heard that we had the same fears about Japan 40 odd years ago and despite several attempts Japan has not been able to build a domestic aircraft industry of note since WWII and they were a nation who produced very high quality planes in WWII. Even Russia struggles with modern airliners, the only thing that keeps that industry afloat is Aeroflot.
Calling someone a "hater" only means you can not rationally rebut their argument.
The market for jet engines is dominated by Rolls-Royce.
I think General Electric and Pratt & Whitney will be very surprised to hear that.
This will not kill Boeing or Airbus. Unlike cheap crap that people buy off ebay, the commercial airplane market in the West is quite image sensitive and financially and managerially cautious. They are not going to switch fleets to cheaper Chinese aircraft just to save a few dollars.
The largest exporter in the US is Boeing. Most of their sales are outside the US. The commercial airline market is a global market, not regional.
Is a Chinese widebody jet an immediate threat to Boeing and Airbus? No - it will take quite some time to develop. Could it seriously hurt Boeing and Airbus in a huge future market? Absolutely. Does it introduce another potential serious competitor? You better believe it. Would airlines switch planes if there was an economic case for doing so? Hell yes - if there is enough financial advantage in doing so they will buy from anyone. Airlines are not terribly profitable businesses so any economic advantage they can realize will be taken advantage of.
Japanese products used to be regarded as cheap crap, even within my lifetime. They got better. Lots better. Chinese firms already are very capable at manufacturing and there is little reason to doubt that they can produce a competitive product if they decide to do so, especially with state support. Hell China has a very active space program now. Canada's Bombardier and Brazil's Embraer already have excellent products in the regional jet market. No reason China can't join the party too.
I didn't say, "no other country" will make it to the moon this century
Explain what, exactly, you were thinking when you wrote this sentence. Seriously. What the bloody blazes are you replying to in my message? Go re-read my message.
upcoming economic crash
Yeah, and it took US merely 40 years to get to the moon from the beginning of the Great Depression with a world war eating up a significant chunk in between. But the space race to get to the moon really started from Kennedy's announcement in 1962, so it really took us 7 years with 1960s technology to get there.
So what you've said is that it will take the Chinese 13 times longer to get to the moon than we did assuming they start immediately.
Nope, I don't buy it. I don't buy your stupid assertions. They have no basis in reality. You ignore the development rate of the Chinese. You completely ignore the starting point of the Chinese. You ignore the education level of US educated Chinese scientists and engineers. Indeed, the only reference you have is your own biases from your own head.
It's attitudes like yours which make me fear for the future of the US in science and technology. Many people think like you. Many are willing to simply write off the Chinese even as they have been kicking our ass for 10 years. This is the complacency that nearly brought down the US automotive industry *twice* in the last 40 years. This is the complacency that will cost us our future.
Fuck you.
Sincerely,
BMO
Thanks for the vote of confidence.
Many top Chinese engineers and scientists are Western educated, so calling them into question calls our own system into question. And yes, it's an unfair comparison. It's like asking Hasbro to come up with a moon rocket. Maybe, if there is a Werner Von Braun in Pawtucket, Rhode Island.
I don't get the arguments about how the Chinese will always lag in these threads, how they're slow, how they don't know how to do anything well enough, that they make crap. I'm actually old enough to remember the exact same arguments said about the Japanese. I was a kid, but I did hear it from my parents, especially when I was told about build quality. Then the 1980s happened. Then Chrysler had to be bailed out by Ronald Reagan, and suddenly Japanese cars and electronics were what everyone wanted.
And we proceeded to say the same things about the Koreans (A Hyundai is one of the most reliable cars out there, and everyone seems to have a Samsung computer monitor or big screen TV). And we've also said some not-so-nice things about the Taiwanese too.
Funny how they've been able to catch up. The Chinese can't do the same? I don't buy it.
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BMO
I'm pretty sure you are a troll but eh, whatever...
Unfortunately, here in reality, the economics profession is a complete fucking failure of a joke.
It is called the dismal science for a reason. However that is mostly because it is REALLY hard to accurately model human behavior. People are unpredictable and do unpredictable things, both individually and in groups. If you can do better a Nobel prize awaits you.
Banks are run by dipshit morons propped up by criminal politicians.
Morons? No they aren't stupid. Greedy, selfish or arrogant I might go with but the guys who run banks are very very bright. I've met more than a few myself. Stupid is not a word that would come into the conversation.
Corporate accounting is a total fraud.
How so? I am a certified accountant who does corporate accounting for my day job so I'm more than passingly familiar with this capabilities and limitations of corporate accounting. It's certainly possible to have fraudulent corporate accounting (Enron, etc) but that hardly is evidence that corporate accounting as a whole is a "total fraud".
Ridiculous models conflate assets and technology and labor along with fiat currencies that have no real measurable value.
Do you have even the foggiest idea what the word asset means? Technology, labor and currency are BY DEFINITION assets. Anything tangible or intangible that can be owned or controlled to produce an economic benefit is an asset. Fiat currency's have measurable value and that value is measured every day. So long as people believe something has value, it does. Gold only has value because people believe it does. Same for any other resource.
The entire bullshit field is based on a fantasyland premise of perpetual growth in "utility" along with magical non-zero-sum mathematics at odds with even basic physics.
Glad you could distill the entire life's work of all those Nobel laureates. I'm sure they'll be happy you cleared up that they were wasting their time on a fruitless endeavor. You will of course be providing your own ever so insightful solution to all the worlds economic problems? ... No? Oh, I get it. You're on a populist rant and don't have time to be slowed down by actual logic, facts or reason.
With regard to China, the result is exactly what one would expect when trading with a country with few natural resources and a billion consumers
"Few natural resources"? Are we talking about the same country? China has natural resources that rival the US available to it. They are rich in some and lack others, just like any other country. Their needs are immense and often outstrip their domestic production as one might expect with a country containing 1/6 of the world's population but China is hardly resource poor.
American labor has lost all value.
Really? Then how does the US still have the largest economy of any single country in the world?
A commonly-used short-hand term in the British and Commonwealth military during the WWII period was U/S, short for "unservicable" meaning something wasn't worth repairing and it should be junked or dismantled for spare parts. It had nothing to do with the USA.
This probably had to do with something as simple as screw threads.
A Whitworth (55degree)threaded fastener (England) isn't going to go into a B&S(60 degree)(US) threaded hole regardless of quality.
But it didn't stop there. When English, Commonwealth, and US threads all became 60 degree inch based threads, it was still a crapshoot whether a fastener would fit in a hole. It was this way until the Unified Thread standard came to the fore in 1949.
You can imagine how much hell this played with "Lend Lease" equipment.
Take apart an American piece of equipment from WWII, snap/lose/strip an important screw, and you might as well junk it if all you've got is Canadian or English screws kicking around. And since the Unified Thread standard didn't get approved until 1949, this coincides with your WWII timeframe.
So yes, I'll buy the U/S story.
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BMO
Mitsubishi Heavy Industries would beg to differ.
Indeed, I hope they do, to light a fire under the complacent asses currently inhabiting my country - the US.
I've been hoping so too, but so far it doesn't seem to be working, so I'm growing less optimistic. I think this is the major reason: http://www.nytimes.com/2010/10/12/opinion/12brooks.html ... in the old days the US spent tax money on good old engineering to do great things like get people to the moon. Now it spends its money on massive bureaucracies that push paper around, for the sake of pushing paper around. And I'm afraid I don't think too many people in that system see or care about the bigger picture or bigger goals, just their next paychecks and the next department budget.
Just because the Chinese have learned the right way to make money and enhancing their competitiveness, It doesn't give you any right to bitch about it.
More angry that the politicians over the last 30 years have dismantled the system that created this economy over the last 200 years. The Chinese then went and implemented our system.
The system is from Alexander Hamilton’s Report on the Subject of Manufactures (1791). From here:
When what's good for business is not what is good for the country, the job of government is to step in and ensure we do what is good for the country. Government has become too enamored of business and has lost its way.
We can win..just let loose the market forces and we will see wonders.
Sounds like a religious statement. I don't subscribe to your religion on that one. Over the last 30 years we have tried that and it hasn't worked. All it has done is shipped jobs overseas, made the richer, pushed the middle class downward, and made the poor poorer. There is data that shows this hasn't worked. Look at the data and stop believing in fairy tales.
There are few patriots in the CxO class. As long as Wall Street is only interested in short term gains, that's all these guys are interested in too. So, we indeed sell the Chinese the rope they will use to hang us. The Darwinian capitalism you are recommending just eats itself.
It is more complicated than the simple knee-jerk reactions I see posted here. China is very productive and has a huge capacity for more productivity. However, China does not produce enough internally to sustain a higher standard of living for their growing population. At this time, they must export in order to create a better standard of living overall. Since they have an absolute competitive advantage in some areas, especially labor-intensive areas, they will export increasingly higher-quality goods to those countries that already have a high standard of living.
However, Chinese government takes the results of the increased productivity and allocates it to "desirable" industries. At this stage of their economic development this allocation works in many areas, but as the number of subsidized industries increases and mis-allocated funding proliferates, the government burden increases and robs the nation of its productive gains. As costs increase, prices go up both internally and externally, and China loses its absolute competitive advantage. Most of China is so far behind economically that there is a built in sink for productive output at this time, but China must trade with other nations in order to continue to prosper. When they can no longer trade competitively with other nations, those industries that emigrated to China will return home.
I remember reading a comic, called "Japan, Inc." many years ago, and I wondered then how Japan could sustain its Economic growth while violating these basic Economic principles. Guess what?: A few years later Japan's growth stalled and the absolute advantage went to places like Taiwan, Korea, Malaysia and the Philippines, and now China. Japan is still trying to recover.
Eventually, in the absence of major wars or worldwide catastrophe, most of the world's economies will be at parity, in which case, the USA will represent about 20-22% of the world consumption and trade. It appears at this time that the last areas to become affluent will be on the African subcontinent.
China cannot be its own best customer forever. Unfortunately, with increasing public debt and the propensity for the USA to try to spend its way to prosperity instead of produce its way to prosperity, the USA may have some real economic collapse that will adversely affect the rest of the world, and spoil the ride for everyone.
"The mind works quicker than you think!"
there must still be a plan for the last drop of oil
According to peak oil theory, we aren't really worried about "the last drop of oil" ... I forget who said it, but the gist of it is captured in the saying "we will always have enough oil for our bicycle chains."
What we need to be prepared for is a world in which profligate burning of fossil fuels becomes increasingly expensive and unrealistic. GP's question of what the aviation industry will look like in 50 years is a good one, because in 50 years we will well and truly be on the other side of the peak oil curve, and we will have either figured out some kind(s) of alternative(s), or we will be living in a much smaller, more local world where people tell their incredulous grandkids stories about taking a trip to the Cayman Islands for a week just to get away.
If libertarians are so opposed to effective government, why don't they all move to Somalia?
This is a classic example of the Prisoner's Dilemma. If you don't sell your technology to China, then your competitors will, so you should too. Government export restrictions should be imposed for everybody's benefit.
Offshoring maintenance? As in having maint done in a stopover in Hong Kong or Cyprus instead of the States? I hadn't heard of that. Any more info on that?
Worse than this. See this NPR story. Aircraft are flown from their home base to Mexico or South America for maintenance by some airlines, because the overall costs (including the rather high per hour operating costs of moving the aircraft) is cheaper than domestic. Another NPR story lists some of the problems with this. An except from the second story:
What part of "shall not be infringed" is so hard to understand?
I'm not sure what it is. Part of me thinks it might be growing nationalism on the part of Chinese visiting English language web forums, part of me thinks it might be the sort of general anti-Western self-loathing common to Slashdot.
And part of me thinks that if the Chinese government wanted to, they could probably easily fill a propaganda ministry building with a few thousand English speaking Chinese who did nothing all day but cruise English language web forums and slag America(ns) and work to suppress negative opinions of China & the Chinese.