China on runway for jet takeoff
By Richard A Bitzinger
China may, by the end of the year, start deliveries of the ARJ-21 Xiangfeng
(Soaring Phoenix), its first indigenously designed and developed commercial
regional jet. According to the Chinese media, the fourth domestically-produced
ARJ21-700 plane completed its maiden flight successfully in Shanghai on April
Although the project itself is relatively modest in ambition and scope, the
significance of the ARJ-21's deliverance is that it could be the precursor to
the development of an entirely new industrial sector in Asia. The ARJ-21 series
of large passenger jets offers serious competition to a field that is currently
dominated by just a handful of firms in the Western hemisphere.
Asian aerospace companies have tried before to break into the
"big boys' club" of commercial aircraft production - and failed miserably. Just
four companies dominate the global passenger jet business: Boeing and the
European consortium Airbus are the sole manufacturers of large commercial
aircraft (125 to 650+ seats), while Canada's Bombardier and Embraer of Brazil
vie to supply regional jets in the 35-to-125 seat capacity.
The ARJ-21 is perhaps Asia's best and strongest hope to date for finally
penetrating this tight market. No other Asian commercial airliner program has
progressed this far in terms of design, development, and manufacturing, and the
Chinese government appears to be strongly committed to seeing the ARJ-21
through to fruition, not only by adequately funding the project and working to
ensure domestic (and even overseas) orders, but also by restructuring the
Chinese aircraft industry so it can expand and become globally competitive in
the commercial jet sector.
The Asian aerospace industry is littered with the bones of failed commercial
aircraft endeavors. Most ventures were stillborn, such as South Korea's plans
in the 1990s to produce a 50-seat regional jet. Two of the most ambitious
efforts were on the part of Indonesia and Japan. Indonesia's former president,
Suharto, at the urging of his Minister of Technology (and later his successor)
BJ Habibie, poured billions of dollars into IPTN, Indonesia's aircraft
manufacturer. Out of this came the N-250, a 50-passenger turboprop commuter
plane, of which only two prototypes were built before IPTN collapsed under the
weight of the Asian financial crisis in the late 1990s. Another IPTN project,
the N-2130, a 100-seat regional jet, never got off the drawing board. 
Japan was even more ambitious with its plans to become a leading commercial
aircraft manufacturer. In the 1960s, it built the YS-11, a 60-seat turboprop
commuter plane that many thought would be the first in a series of
Japanese-made commercial airliners. In fact, one of the more alarmist notions
to come out of the Japan-bashing school in the late 1980s and early 1990s was
the belief that by the turn of the century we would all be flying wide-bodies
produced by Mitsubishi or Kawasaki.
The reality was much more sobering. From the late 1960s to the early 1990s,
Japanese government and industry labored together on a number of passenger jet
projects, starting with the YX, a planned 200-seat commercial jet. This was
later scrapped in favor of the more modest YXX, a 100-150 passenger airliner,
and later the even more modest YSX, a 60-seat regional jet. None of these
aircraft ever made it beyond the specifications stage, let alone fly. 
Today, most Asian aerospace firms have had to be content with being
subcontractors and suppliers to the leading Western aircraft manufacturers like
Boeing and Airbus. Not that this cannot be very lucrative; Japanese aircraft
firms have a 20% stake in the Boeing 777 program and a 35% work share in the
Boeing 787, including production of the critical central wingbox. On the other
hand, being a subcontractor has none of the glamour and cachet of having your
company's name on the side of the aircraft.
China - The future?
China has also had its share of failed passenger airliner schemes. In the
1970s, it developed the Y-10, a virtual clone of the venerable Boeing 707. In
the 1990s, it produced the MD-80 passenger jet under license from McDonnell
Douglas. The Y-10 never made it out of the prototype stage, while MD-80
production was abandoned after only 35 aircraft were built.
Yet, the ARJ-21 could turn around Asia's commercial aircraft sector. The ARJ-21
regional jet, launched in 2002 during the Tenth Five-Year Plan (2001-2005), is
a different, more realistic venture. It is a smaller scale plane, seating
between 90 and 105 passengers, designed for short-haul flights of less than
three hours (People's Daily, November 4, 2002). It is intended first and
foremost to meet China's burgeoning demand for internal air transport; the
country is estimated to require up to 1,000 medium-sized regional jets over the
next 20 years. Consequently, the ARJ-21 has a huge domestic market to tap into
and build upon.
The ARJ-21 has already secured more than 180 firm orders from Chinese airlines.
From three original launch customers - Shangdong Airlines, Shanghai Airlines,
and Shenzhen Financial Leasing - the plane's order books have expanded to
include three other local airlines: Xiamen, Kunpeng and Joy Air. The plane has
also scored overseas customers, including Lao Airlines and GE Commercial
Aviation Services (GECAS); GECAS, an Irish-American commercial aircraft leasing
company, has ordered five ARJ-21s, with an option on 20 more. Currently, the
ARJ-21 has a respectable backlog of 240 planes (firm orders plus options).
Overall, China is rapidly becoming the commercial aerospace hub of Asia. In
addition to the home-grown ARJ-21, China is assembling the Airbus A320
commercial airliner in Tianjin. As part of the deal, Airbus built a final
assembly line nearly identical to the A320 plant in Hamburg, Germany, and
production will reach four aircraft per month by 2011.  Meanwhile, Embraer
has a joint venture with the Harbin Aircraft Industry Group to co-produce the
35-50 passenger ERJ family of regional jets. Airliners produced at both plants
will mainly serve the Chinese airline industry; therefore, these programs serve
mainly as an offset to promote further sales to the Chinese aviation market.
At the same time, China's domestic aircraft industry is not resting on its
laurels. In 2009, it unveiled a scale-model of a 170-190 seat commercial
airliner, designated the C919, which will directly compete with the Airbus A320
and the Boeing 737. An obvious play on the Boeing B7x7 designator system, one
can infer that the Chinese intend this plane to be a player in the global
commercial aircraft market. The C919 is supposed to have its first flight in
2014, with deliveries commencing in 2016.
Ironically, whereas in the past (and even up to the present), Chinese aerospace
firms often have served as subcontractors to Boeing and Airbus, foreign
companies are now vying to become suppliers and subcontractors to the Chinese
aviation industry. More than 20 overseas firms are partnering on the ARJ-21,
including General Electric (engines), Rockwell Collins (avionics), Leibheer
(landing gear), and Parker Aerospace (flight controls).  In addition, CFM
International has recently been chosen to supply its LEAP-X powerplant for the
C919, and it will subsequently build a final assembly line in China to produce
To develop and build the ARJ-21, China cobbled together several competing
aircraft manufacturing groups into a single consortium, known initially as the
AVIC I Commercial Aircraft Company (ACAC). Members of ACAC included the
Shanghai Aircraft Research Institute, the Xi'an Aircraft Design and Research
Institute, the Chengdu Aircraft Industrial Group (CAIG), the Xi'an Aircraft
Industry Group (XAIG), the Shenyang Aircraft Corporation (SAC), and the
Shanghai Aircraft Manufacturing Factory (SAMF). The Shanghai and Xi'an research
institutes were responsible for designing the aircraft, while workshares were
distributed among the four manufacturing companies accordingly: CAIG -
nosecone; XAIG - wings and fuselage; SAC - empennage (tail section), pylon and
vertical stabilizer; SAMF - horizontal stabilizer.
In addition, SAMF will have responsibility for final assembly of the ARJ-21 at
its Shanghai facility. 
To further aid the development of its aviation industry, China also recently
decided to consolidate its aircraft-manufacturing sector. In 1999, Beijing
broke up its large defense-oriented state-owned enterprises into smaller units,
in the hope that these new industrial groups would compete with each other and
therefore become more efficient, innovative, and market-oriented. Hence, the
old Aviation Industries of China (AVIC) was split into AVIC I - which
manufactured fighter jets and undertook most large commercial aircraft projects
- and AVIC II - which had responsibility for building helicopters and trainer
From the beginning, however, it was apparent that these two new industrial
groups would overlap very little in terms of products, and so any benefits of
competition were few. Additionally, AVIC I appeared to get the bulk of the
lucrative and prestigious aviation programs, while AVIC II staggered along with
a handful of less glamorous projects.
In 2008, therefore, Beijing re-merged AVIC I and AVIC II back into a single
unit, again called Aviation Industries of China. This new AVIC regards this
reconsolidation as creating sufficient "critical mass" so as to more
effectively and efficiently develop new indigenous aircraft and aerospace
technologies, both in the military and commercial sectors. It is also likely
that the new AVIC foresees so much work coming out of future commercial
aircraft production that it will require the involvement of the manufacturing
centers of the old AVIC II to help fill all the orders.
With the re-merger of AVIC, ACAC was re-established as the Commercial Aircraft
Corporation of China Ltd. (COMAC). This new civil aircraft company will have
responsibility both for building the ARJ-21 and for developing the C919
passenger jet. COMAC is jointly owned by the reconsolidated AVIC, the central
Chinese government, and the Shanghai regional authority.
The success of the ARJ-21 will revitalize the Asian commercial aircraft
industry. For the first time, this part of the world will have a product that
can compete in an industrial sector historically dominated by North Americans
and Europeans. More importantly, China could eventually become a hub for
regional civilian airliner production, bringing in other aerospace firms from
throughout Asia to partner on follow-on commercial aircraft projects. Singapore
Technologies Aerospace, for example, already cooperates with Chinese aviation
companies in manufacturing the Eurocopter EC-120 light utility helicopter,
while back in the mid-1990s South Korea and China explored the idea of
co-developing and co-producing a twin-engine regional jet. 
Can Asia, led by China, do with commercial aircraft what it did with consumer
electronics, automobiles, semiconductors, and personal computers? In other
words, can it leverage its comparative advantages in low-cost manufacturing and
growing technological prowess to become a global powerhouse in this sector as
Despite recent progress, the Chinese aircraft industry still faces some
substantial challenges. The passenger jet business has very high entry costs -
and these are likely to soar as China tries to develop an all-indigenous
airliner, with a locally built engine (in particular, China wants to eventually
power the C919 with a locally developed engine), avionics, and flight controls,
all of which are currently imported. Additionally, the ARJ-21 faces stiff
competition from Bombardier and Embraer, and they are not going to cede sales
quietly. Finally, airlines value safety and reliability as much as they do a
good price. Given China's substandard reputation in general quality control,
China's aircraft industry may likewise face considerable skepticism when it
comes to buying their indigenous commercial airliners.
None of these hurdles are likely to deter the Chinese from their efforts. The
commercial aircraft business is as much a matter of national pride as it is one
of profits. The momentum that propels China to advance itself in
microelectronics, automotives, space and emerging technologies is also driving
its aircraft industry. The ARJ-21 may not end up being a commercially
successful airliner, but it is a big step forward in China becoming a major
manufacturer of commercial aircraft.
1. M Cohen, "New Flight Plan," Far Eastern Economic Review, March 2, 2000.
2. Richard J. Samuels, "Rich Nation, Strong Army": National Security and the
Technological Transformation of Japan (Ithica: Cornell University Press, 1994),
pp. 247-249, 256.
3. "Construction Started on Airbus A320 Family Final Assembly Line in China,"
Airbus Press Release, 15 May 2007.
4. AVIC I Commercial Aircraft Company (ACAC) website, www.acac.com.cn.
6. "K100 Regional Jet," GlobalSecurity.org,
Richard A Bitzinger is Senior Fellow with the Military Transformations
Programme at the S Rajaratnam School of International Studies (RSIS), Nanyang
Technological University. Formerly with the RAND Corp. and the Defence Budget
Project, he has been writing on Asian aerospace and defence issues for more
than 20 years.