Aviation Industry Corporation of China
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China tests new fighter jet, challenges West’s monopoly on advanced warplanes
China has tested the latest version of its fifth-generation stealth fighter, state media reported Monday, as it tries to end the West’s monopoly on the world’s most advanced warplanes. The test comes as the nation flexes its military muscles, sending its sole aircraft carrier the Liaoning into the western Pacific in recent days to lead drills there for the first time. The newest version of the J-31 -- now renamed the FC-31 Gyrfalcon -- took to the air for the first time Friday, the China Daily reported. The so-called “fifth-generation” twin-engine jet is China’s answer to the US F-35, the world’s most technically advanced fighter. The new FC-31 has “better stealth capabilities, improved electronic equipment and a larger payload capacity” than the previous version which debuted in October 2012, the newspaper said, quoting aviation expert Wu Peixin. “Changes were made to the airframe, wings and vertical tails which make it leaner, lighter and more manoeuvrable,” Wu told the paper. The jet is manufactured by Shenyang Aircraft Corp., a subsidiary of the Aviation Industry Corp of China (AVIC). The fighter is expected to sell for around $70 million, the article said, aiming to take market share away from more expensive fourth-generation fighters like the Eurofighter Typhoon. AVIC has said that the FC-31 will “put an end to some nations’ monopolies on the fifth-generation fighter jet”, the China Daily reported. China is aggressively moving to develop its domestic weapons industry, from drones and anti-aircraft systems to homegrown jet engines. In the past it has been accused of copying designs from Russian fighters, and some analysts say the FC-31 bears a close resemblance to the F-35. When completed the FC-31 will become the country’s second fifth-generation fighter after the J-20, which put on its first public performance at the Zhuhai Air Show in November.
AVIC developing ultrafast tilt-rotor aircraft
Chinese helicopter designers are focusing on the development of an ultrafast tilt-rotor aircraft capable of flying 500 kilometers per hour, the nation's top helicopter researcher said. Wu Ximing, chief helicopter designer at State-owned aircraft giant Aviation Industry Corp of China, told China Daily on Monday that researchers at the company's Helicopter Research and Development Institute are developing the Blue Whale tilt-rotor aircraft, China's equivalent of the United States' Bell Boeing V-22 Osprey. "We will design two variants of the Blue Whale - a medium-duty type and a heavy-duty one. The medium-duty model will have a maximum takeoff weight of 20 metric tons, and the heavy-duty model 40 tons. They can fly as fast as 500 km/h," Wu said. Modern helicopters usually have a maximum speed ranging from 250 to 300 km/h. The aircraft will be able to conduct vertical takeoff and landing in tough terrain like a conventional helicopter, and will have a longer range and higher cruising speed that can compare to turboprop jets, Wu said, adding it can also carry heavier payloads than helicopters. With four rotors, the Blue Whale will have better reliability, maneuverability and safety than its U.S. counterpart, the V-22 Osprey, he added. Wu expects the tilt-rotor to conduct a wide variety of tasks, such as disaster relief, supply airdrop and other emergency response operations. AVIC sees the importance of developing the ultrafast tilt-rotor aircraft, he said, adding, however, that it will be a long time before they are ready for mass production due to the technological complexity. An earlier report by China Aviation News, a newspaper owned by AVIC, quoted engineers at the Helicopter Research and Development Institute as saying that the Blue Whale will have a flight range of 3,100 km and meet demands of rapid troop deployment of the Chinese army and navy. The U.S. is flight testing the Sikorsky S-97 Raider high-speed armed helicopter. Sikorsky Aircraft, the manufacturer, said it has a cruising speed of 407 km/h, more than 100 km/h faster than the U.S.' Boeing AH-64 Apache that is widely considered the best combat helicopter in the world. Russia is also researching designs for a stealth combat helicopter with ultrafast speed, Russian media has reported.
New Horizons: Investing in China’s Civilian Airport Industry
The Civil Aviation Administration of China (CAAC) recently issued guideline encouraging private investment into China’s civilian airports. Along with reducing the number of state-owned and state-holding airports, private investors now have full access to the construction and operation of civilian airports and their affiliated facilities. Intermediate services, such as consulting, designing, and airport maintenance, are also open to qualified private and foreign entities. In addition, the approval mechanism for private investment in terminals, logistics, and other operations has been removed. The guideline also emphasizes innovation of financing methods for construction and operation, especially in regards to the public-private partnership (PPP) structure. The Civil Aviation Administration of China (CAAC) recently issued guideline encouraging private investment into China’s civilian airports. Along with reducing the number of state-owned and state-holding airports, private investors now have full access to the construction and operation of civilian airports and their affiliated facilities. Intermediate services, such as consulting, designing, and airport maintenance, are also open to qualified private and foreign entities. In addition, the approval mechanism for private investment in terminals, logistics, and other operations has been removed. The guideline also emphasizes innovation of financing methods for construction and operation, especially in regards to the public-private partnership (PPP) structure. In 2015, the civil aviation industry transported 436 million passengers and 6.3 million tons of cargo and mail, and maintained steady performance growth despite the pressure of the slowing global economy, according to the CAAC. With an estimated market value exceeding $1 trillion, China is expected to become the world’s largest aviation market over the next two decades. A positive regulatory environment, in conjunction with policies such as the 13th Five Year Plan and the One Belt, One Road initiative, provide vast opportunities for private investment in China’s airports. However, strict supervision from government authorities remains and there is a limited track record for foreign companies participating in such projects. Paths to participate in China’s civilian airports market China had 210 civilian airports by the end of 2015, and will have more than 260 by 2020, according to the 13th Five Year Plan. Accordingly, the CAAC announced an $11.9 billion investment into civil aviation infrastructure in May 2016, including 11 key construction projects and 52 aviation upgrades. Constructing an airport in China is complex, but several foreign companies already have experience participating such projects, including aiding in the design of Beijing Capital Airport and Guangzhou Baiyun Airport. As the intermediate service market opens up, qualified foreign investors can choose to participate in other stages of the construction process, either individually or as a joint venture. Furthermore, the new guidelines state that private capital can be invested in the comprehensive development of the land, real estate, advertising, and other facilities in the airport economic zone. Approval for private investment in an airport’s commercial operations, such as terminals, logistics, warehousing, and ground service, is no longer necessary. Instead, a simplified procedure removes barriers for foreign companies to invest in the operations of civilian airports. The Aviation Industry Corporation of China (AVIC) predicts an increase of 4,583 civilian airliners over the next 20 years, indicating the growing need for related airplane support and customer services based in airports. Airport funding methods Local governments and civil aviation development funds provide the majority of funding for airports in China. But with the high debt ratio of local governments, this funding structure will no longer be sustainable, making private capital instrumental essential for future construction and the operation of new civilian airports. Based on the new guideline, private capital can directly participate through several different means including franchising, transfer of operation or stock rights, and entrusted operation. Alternatively, private capital can be invested in airport-related trust schemes or equity funds. The PPP model has a successful track record in constructing transportation infrastructure in China. In terms of airports, the establishment of Hong Kong Zhuhai Airport Management in 2006 allowed Hong Kong International Airport to hold stake in and manage the operation of Zhuhai Airport. Foreign companies can use this practice as a model to participate in China’s civilian airport market. In addition, the National Development and Reform Commission (NDRC) issued a circular in August to promote PPP in traditional infrastructure fields: civilian airports sector is specifically listed in the catalogue. However, the proportion of foreign investment in Chinese PPP projects has been low in recent years due to the high risk and cost. Project implementation, investment withdrawal mechanisms, and the credit system can all pose risks for foreign investors. For instance, the construction of a project may be interrupted by unexpected social or financial reasons, and the risk of a local government default. Further, foreign investors bear a relatively high cost for communication and evaluation, such as negotiating with the local government through an agent, as well as conducting extensive due diligence. Partnering with domestic enterprises, especially state or local government owned enterprises, is a viable way to get involved. Observations China’s civilian airport market is multi-dimensional; therefore, it is critical for foreign companies and investors to identify their position in the market. Qualified professional service providers should focus on their specific professional field, be it environmental consulting or special equipment provision. General aviation airports are a good entry point, especially for experienced foreign general aviation companies. Also, unlimited inter-investment between airports and other related market entities offers a key access point to the whole industry. However, due to the capital-intensive and comprehensive nature of civilian airport projects, foreign investors will inevitably need to develop a suitable PPP model in order to participate in the market.
Knowledge Graph
Examples
1 Aviation Industry Corporation of China (AVIC) is a Chinese state-owned aerospace and defense company. It is ranked 159th place in the Fortune Global 500 lists.
2 Aviation Industry Corporation of China purchased American aircraft engine manufacturer Continental Motors, Inc. in 2010, and American aircraft manufacturer Cirrus in 2011.
3 China Aviation Industry Corporation was a Chinese consortium of aircraft manufacturers. On July 1, 1999, this consortium was split into China Aviation Industry Corporation I and China Aviation Industry Corporation II.