China establishes company to make its own jumbo jets

BEIJING — China has established a homegrown company to make passenger jumbo jets, state media reported Sunday _ a step forward in the country's quest to become less dependent on Boeing and Airbus.

China Commercial Aircraft Co. was established in Shanghai with registered capital of 19 billion yuan $2.7 billion, the official Xinhua News Agency said.

It said the central government and the Shanghai government are among the major shareholders, as are China's two main aircraft manufacturing and servicing companies, China Aviation Industry Corp. I and China Aviation Industry Corp. II, which were split off from state-owned China Aviation Industry Corp. in 1999.

Europe's Airbus has forecast that China's domestic market will increase fivefold by 2026. Airbus and Chicago-based rival Boeing dominate the market for commercial airplanes carrying 100 or more people.

Xinhua said Commercial Aircraft Co. will be able to make planes with more than 150 seats.

General manager Jin Zhuanglong said in a Xinhua interview that it was too early to say when a Chinese-developed jumbo jet would be taking off, as it would take a long time to develop homegrown talent and do research.

"According to the development history of Airbus and Boeing, the development and success of civil planes cannot be realized by relying on one or two generations," he said.

Comments

[IllinoisVoter]

Is this another misallocation of resources as China attemps to circumvent agricultural
collapse with rapid industrial growth?. The faster they grow the more energy and food
they import. From a market prospective I suppose 10% growth is wonderful, but when
a nation of 1.3 billion needs to import 60% of its' primary protein (Soy) the trajectory
is clear. At two hundred dollars a barrel can you tell me what airline is going to be
purchashing new fleets when bankrupt carriers have mothballed planes all over
the world?

[KillTheMessenger]

China is flush with money. This is simply part of their efforts to bring their country up to par with all Western economies. Which is their right, no matter how much you hate the competition. As far as energy and food demands are concerned, on a per capita basis China is nowhere near the US. No problem.

[shanghaislim]

Just went to Beijing twice in the last three weeks and always in Shanghai. The money is just plain silly. The wealth is extraordinary. Sure there are impoverished people. Ever been to the poorest areas of America (Indian Reservations, Louisiana Back Country, West Virginia, East L.A., Harlem to name a few)?????

This world is about rich and poor no matter which country.

[escobar]

Aircraft have been one of the greatest exports for the USA.
This will end the super power status of the USA.
As it is, we borrow money from China to act out the neo-con agenda of Wolfowitz and the GOP.
Clinton signed on to NAFTA and went along with the GOP goal to enrichen intenational corporations at the expense of the US middle class. He worked to destroy organized labor and democracy in the workplace. He was back pedaling most of the time for his sexual indescretions wasting the clout of his office for some fun and a desire to be popular.
Next the prominance of MIT and other great techincal univesities will fade. China sent thousands to study medicine and engineering.
The US students learned how to maximize profits studying business and law. At the same time, most of the best colleges have become out of reach for most middle class students. Seats go to the higest international bidders. Teaching is a second class and even dangerous occupation in many places.
Hopefullly, as the next dominant force on the planet.China will not be so easily led into squandering their wealth fighting stupid endless wars.
This marks the end of US dominance in the world economy.

[jmsent]

Great. Flying on a reverse engineered 787. Doesn't that just boost your confidence in flying on Chinese airlines?

[KillTheMessenger]

Actually, they tried the reverse engineering approach on a Boeing plane decades ago. It failed. They learned a lesson. The real problem for everyone who underestimates China is that they are not reverse engineering any longer. They are doing it the hard way... and they are VERY good at engineering. Which might have to do with their superior schools....

[calgary]

You are right. China did try to build a commercial jet but failed but that was the old China. The new China with its wealth and brain power can and will build jets and any other manufactured products equal or better than anything the West has to offer. The sleeping dragon is no longer sleeping. China will be the next super power. Let hope they will have all the problems that comes with being a super power :)

[Viper]

In the mean time American companies (I use that term losely) have outsourced so much of their engineering and sceince to a dollar a day wages in China and India, that only 25% of our graduates in engineering can now get a job.

Neother india or CVhina are free markets charging us 10 times more tarrif than we charge them. And American companies have to give the Cimmunist Chiinese a 505 interest to do business there in the Chineses SUB... same in Dubai! Boy are we stupid!

Of course thats a 50% tax rate in reality and yet our 35% tax rate repugs would have you believe is higher! LIARS each and every one!

Regards

[pros54]

I guess people said the same thing about the Japanese cars . If you are old enough may be you will remember Japo?

[Blutus]

If they make jets the way they make toys and farm fish,

I'll pass.

[KillTheMessenger]

Did you notice that they make IPods and the best cell phones in the world? Maybe you didn't because you might never have seen cell phones made exclusively for the Chinese market. Unlike Americans, Chinese are very picky about quality. They want the best only and they are willing to pay for it. It's the American Wal-Mart phenomenon which makes China look like a producer of cheap goods. They aren't. They just cater to everyone's taste. If you are willing to put the money on the table, they will make the highest quality goods for you (did you ever see real Chinese antiques?), if you are asking for cheap crap, they will sell that to you. It's YOUR choice, not theirs.

[shanghaislim]

Excellent Analysis. China has produced some of the best of the best over 1500 years. They used to lead the world in technology and innovation.

You are dead on. The Chinese created gunpowder. They created porcelain that is still unmatched today. The French and the Dutch sent there people to China to learn how to make the finest in Porcelain during the Ming and Ching Dynasties.

Sony Computers among others are made in China. They have been using text messaging systems on their cell phones way way before Blackberries became popular. Now the iPhone and the best of the best in high end cell phones.

The Chinese have led the world before and have their sight set on doing in once again. Without using their military, as so many failed systems aver the last 2000+ years have done and eventually failed and faded away into history.

[hypnotoad72]

Another reason not to fly, I suppose. I don't like being cynical, but the large number of recalls and other issues, WORLDWIDE, should be a concern to everybody. Especially China, which would lose its customer base. I don't think that's a good way to make money, forgive me.

[gcallaghan]

The downside to the global economy is when others around the globe compete in it.

[Veri]

Once the Chinese begin buying their own jets, Boeing and Airbus are out of a large sum in profits. Done well enough, they just might supplant Boeing and Airbus in the Asian markets over the coming decades. Further eroding Boeing and Airbus profits.

And all of this by a mix of command-and-control, central planning and free-market capitalism. Of course, central planning is so decried by the pinheads in America. And, Western Capitalism is based on inflating money supplies in order to generate more interest-bearing debt that must be paid back to the central bankers. Resulting in more profits without creating a single item of real value.

America gets the hand-me-down consumer goods from China now. Americans buy the crap because we are too poor to afford the really nice consumer goodies.

For those of you who call Chinese goods crap, ever been to China to see the real stuff? Bury your head in the sand. Ignorance is bliss. Ignoring your own economic destruction must be bliss for you also. After all, you grin and take it.

Or, you could find new politicians who look out after your interests. And dismantle the economic interests and replace them with more amiable systems.

[FreedomCorpse]

The chinese will buy a bunch of boeing and airbus planes, reverse engineer them and then compete. Ask how its worked out for Square D with the chinese clones of their products

[loki]

They dont have to. Boeing already has a lot of the design and construction work done in China. Boeing, just like 100s of other US corporations, have handed it all to the Chines on a platter. A platter handed over in the spirit of true American Greed and profit. And now the billions US corporations made from outsourcing to China and other countries, is coming back to bite them in the arse. And I will bet everything I have that these same US companies will be ordering the US government to help them, most probably with US tax payer money.

[Veri]

Those that made this possible don't have to care. Greed has no nationality. Those that made the enormous sums by handing over the goodies are taking the money and investing in China.

So, while Americans suffer, the minority are already making their money and buying their summer condos in Beijing. Welcome to globalization. Only, you and I are peasants and not wanted.

Humans are commodities now. After all, President Bush reduced the economic value of your life so that companies don't have to pay out so much in compensation if they kill you.

[gakabani]

Good bye Boeing! Your nemesis is here to crush you.