China’s Aviation Industry: Lumbering Forward

As we move further into the era of 21st century great power competition, it is important to understand with whom we are competing. This study is the first in a series of studies by the China Aerospace Studies Institute that seeks to lay the foundation for better understanding the Aerospace Sector of the People’s Republic of China (PRC). This study focuses on the major actors and institutions in the aviation portion of the PRC’s aerospace sector. Further case studies will examine specific programs within the sector, as well as the role of so-called ‘private’ or ‘commercial’ companies. This foundational study looks at the national-level, and the state-owned enterprises (SOE) that make up the bulk of PRC aviation.

It goes without saying that the PRC’s system of research, development, and acquisition (RD&A) is very different from that of the United States. As such, it is important to understand just how different it is, in order to really understand the nature of the competition. Whereas the United States largely relies on competition between commercial companies, typically large publicly traded multinationals, for R&D and production, the PRC uses all levers of Party and State power to pursue its goals. This study maps those relations, policy bodies, and centers of specialization.

While this report focuses mainly on the military aspects of the aviation sector, largely because that has been the nearly exclusive focus for the PRC for decades, it is useful to remember that as the PRC attempts to build it own commercial aviation sector, that the bulk of the knowledge, funding, support, manpower, etc. will still come from these SOEs, and the many subsidiaries that they hold or manage. Indeed, it is likely that the next series of major breakthroughs in technology and systems integration that the PRC achieves, will be transfers of intellectual property and technical expertise from the commercial-civil sector back to the military applications, under the PRC’s Military-Civil Fusion (军民融合) state policy dictate.

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