Pontifications: The risk of closing China to aerospace suppliers

By Scott Hamilton

Nov. 30, 2020, © Leeham News: The Trump Administration this month indicated it might expand its ban on doing business with certain Chinese companies.

The Administration says the additional companies have ties to the military. Included in the listing is COMAC.

Reuters reported the move Nov. 13.

If the Administration follows through during its remaining lame-duck time in power, and if the new Biden Administration doesn’t reverse or modify the plan, the long-term effect could hurt the US aerospace supply chain.

Ramifications

Dr. David Pritchard, Associate Professor SUNY Empire State College, specializes in Chinese and Russian aerospace.

“How can the US administration put US supplier restrictions on Comac C919 commercial aircraft (and possibly the CR 929) when the same technologies are used on the Boeing 737 (e.g., avionics and engines)?” he asks. “If the Chinese want to reverse engineer key technologies, then they can strip them off a Boeing 737 to gain the knowledge.”

Pritchard notes that “while many US/China JVs are in place for the ARJ21/C919 commercial aircraft programs, is it more technological support for assembling and servicing the commercial aircraft compared to full transfer technology to the Chinese?  Is the technology on the ARJ 21 second generation and not the latest?”

The ARJ21, of course, is “old” technology. AVIC launched the program in 2002. The first flight was in 2008. Entry into service was in 2016. It’s based on the McDonnell Douglas MD-80.

Suppliers have long tried to protect technology transfer by sharing previous generation technology while developing new versions. This, of course, doesn’t protect companies from IP theft for which the Chinese are infamous.

High-level view

“Let’s look at this from a 50,000 ft. view,” Pritchard says. “The Chinese are readying a launch for China’s Chang’e-5 mission to the moon for collecting lunar rocks. I am sure they are past the technology point of relying on the west for commercial aircraft technology. This is going to drive Chinese innovation (Made in China 2025), with unlimited money from China national policy.”

Pritchard notes that China already collaborates with the Russians to design and build indigenous technology platforms (e.g., engines and avionics). China is reducing relying on “unreliable” trading partners (the US) for commercial aircraft programs that can last 30 years.

“As an example, it was reported that Russia’s MAI transfers composite wing design technology to China for the COMAC CR929,” he notes.

“We are at an inflection point with the West and China for the commercial aircraft industry. The Chinese can’t any longer claim to be an infant industry. The rest of the world needs to hold China accountable to World Trade Organization regulations.  The WTO dispute process is outdated, requiring countries to file a dispute settlement claim against the Chinese to stop government funding tens of billions of dollars to support their commercial aircraft industry development. But they won’t because of possible trade repercussions,” Pritchard says.

“The new US administration and the European Union need to negotiate an updated large commercial aircraft agreement to determine how commercial aircraft programs are launched and funded to ensure the continued technology growth for this important industry.”

 

 

74 Comments on “Pontifications: The risk of closing China to aerospace suppliers

  1. “The rest of the world needs to hold China accountable to World Trade Organization regulations.”

    Amusing when the US itself can’t be bothered …
    .. pushing frivolous sanctions all around.
    … or introducing legislation that decides for others what is good for them or not ( here: NS2 ).

  2. “The rest of the world needs to hold China accountable to World Trade Organization regulations. The WTO dispute process is outdated, requiring countries to file a dispute settlement claim against the Chinese to stop government funding tens of billions of dollars to support their commercial aircraft industry development”

    It seems someone wants to use WTO if it suits, but ignore if not. If we are bluntly honest we know which governments are pumping billions directly, indirectly in Aerospace in a dozen different ways. Ways we know, but love to deny.

  3. The US has abided by the WTO rulings, they eliminated the government assistance programs that were identified as subsidies by WTO. EU has as well. China may not have the same incentive or desire to abide.

    Both US and EU are left with punitive tariff powers, which both are now using, so the dispute is not truly resolved, after 16 years of cases before the WTO.

    I think that was Scott’s point, the WTO may not be able to truly resolve disputes, which still ultimately depend on voluntary cooperative negotiation. It’s a good point, especially since Chinese politics may play a larger role than in the US/EU, and they may not be a willing partner.

    • Are all US/EU government assistance programs eliminated? Probably a negotiated compromise to ensure strategic continuity.

      I’m not sure but I suspect how most Chinese might feel:

      “We are investing in building aircraft for moving around our 1.3B inhabitants, it’s infrastructure. We and other countries need to build prosperity for our people, not to finance your third car.

      Who are those westerners telling us what to do, after subsidizing their own aerospace industries immensely, for as long as they exist?

      Keeping us out to maximize your profits?! How is that fair to the Chinese people? Western games.

      -> Long term w’ll build our own aircraft. Short term we need 200WBs. Be nice, we have choice. “

    • These are not the droid you are looking for.

      i.e. mealy mouthed sophistry does not
      take away from the fact that the US has subverted
      a large majority of international arbitration and cooperation institutions.

        • To put it another way, you can drive a Moon sized object through the effective zone of WTA.

          Its am employment program, for lawyers busy.

  4. The US has deliberately wrecked the entire WTO structure by refusing to approve any new evaluators (judges?) for the appeal and assignment functions – without which the WTO is a meaningless organization.

    There is talk in Europe of setting up an alternative to which the US will be excluded (although all that may change once the administration changes).

  5. We might also ask what wonderful benefits we got from the neoliberal WTO – NAFTA – free trade approach?

    We have cheap T-shirts, but lost our industrial base in steel and aluminum, electronics, textiles, pharmaceuticals, home electronics, ship building, and many other industries. Other industrial sectors are weakened. Millions of middle class jobs have disappeared. Workers everywhere have lost bargaining power and wage growth has been decoupled from productivity growth for 40 years, while the number of billionaires has blossomed beyond imagination.

    Family farms are disappearing and rural communities are losing their small businesses, schools, and health care facilities, as young people move to population centers in search of economic security.

    It’s time to stop moaning about the WTO, and start thinking about new ways to manage globalization.

    • Stan, I fully agree and wrote a lengthy response, but it strays quite far off-topic into social and economic policy, so I cancelled it. But you hit on most of the points that need to be addressed and resolved for globalization to ever achieve the original goals of free and fair trade.

      • The reality is that you will loose jobs with trade.

        There is a balance between competition and shoveling your jobs as fast as you can with the biggest bucket loader made over seas like has been the past MO for both parties.

        There is a place for Tariffs and there is a place for law (minimum wages and benefits overseas, no slave labor etc)

      • You should justify your vague claim.

        With more food produced per person today, but continuing distribution problems such as caused by the North Korean regime which even forbids starving residents from accepting food from relatives in Communist China.

        ‘Globalization’ is a vague term that neo-Marxists like to use to rail against business, while they promote political globalization such as the UN which appoints tyrants to chair human rights committees.

        Your credibility?

        • Oh, I have to remember to name who I am responding to.

          I haven’t seen properly threaded blog software since short-lived Nationweb, which was preceded by CompuServe forums with their very good software.

          (CompuServe software for user computer would fetch the newest posts, in categories and thread selected by the user. Who could prepare responses and new posts offline then upload in a batch.

          Youngies may not realize there was [Internet?] access before www: dialup bulletin boards for information, tech support, and arguing. 😉 Farmers were early adopters despite phone line costs, as they could get data and advice without a library nearby. Facilitated by not including graphics, they were available in folders on the particular service, usually in GIF format for photos and TIF for printable, and as software programs for updating your computer device.

          CompuServe had its own dialup system, in addition to the public subscription service the system was used by H&RBlock tax agents, airline crews, and IIRC reps of a cosmetics company. Very useful. But it never was profitable enough.

          A whole world out there before Web and WorsePress.

    • @Stan: Corporate America offshore jobs to enrich themselves
      Trump’s tax cut gave his biggest donors huge windfall;
      Boeing move production and jobs to SC because of one thing: cheap labor not because they are looking for quality work.

      • @ Pedro, Stan, TW

        Agreed – BA recent steps are clearly preliminary to further off shoring of manufacturing, as per maintenance, as per rest of US Industry over the last 40 + years

        As per Pharma, in particular

        A lot/most of this off shoring was to China – and played a large part in the industrial revolution in that country: a paradox which current US political leadership feels inclined to solve by trade war and by threatening real war – the background against which appeals to WTO rules will render as mere stagecraft

        As for Recent Max disasters this move might bring less corrupt management practices if BA has to compete/operate in less corrupt countries than the US

        All this does nothing for US workers : yet the management class keeps/ups their profits

    • @Stan Sorscher

      “First step in solving any problem is recognising there is one.”

      America’s Not the Greatest Country in the World Anymore
      https://www.youtube.com/watch?v=4fTkA3dvpPM

      IMHO, it appears that American exceptionalism is a major problem for the U.S. in 2020.

      Why America Resists Learning From Other Countries
      https://www.theatlantic.com/politics/archive/2020/05/coronavirus-could-end-american-exceptionalism/611605/

      R. Daniel Kelemen, a political scientist at Rutgers University who has studied what the United States could learn from European public policies, told me that those who subscribe to the ideology of American exceptionalism, or as he described it, “the notion that the United States is fundamentally different from and superior to other nations,” have traditionally resisted seeking out lessons from other countries’ experiences. At the very least, “this view leads many to think that the U.S. is simply so different that policies that might work in other countries could simply never work here,” he wrote in an email.

      NB: Apologies for the long off-topic comment, but Stan Sorscher’s “pontification” on “what wonderful benefits the U.S. got from the neoliberal WTO – NAFTA – free trade approach,” IMJ requires a solid rebuttal.

      Number one, the U.S. could perhaps stop blaming China (and other nations) for its problems and recognise that the society of the United States has major structural and social problems of its own making.

      Number two, the U.S. could perhaps look at how other Western countries are countering China.

      Stan Sorscher said: We have cheap T-shirts, but lost our industrial base in steel and aluminum, electronics, textiles, pharmaceuticals, home electronics, ship building, and many other industries. Other industrial sectors are weakened.

      With the financialisation of the U.S. economy and Wall Street’s influence on the U.S. economy increasing rapidly after Ronald Reagan deregulated it in the 1980s, the industrial decline in the U.S. accelerated during the 1980s.

      How Wall Street Devoured Corporate America
      https://www.theatlantic.com/business/archive/2013/03/how-wall-street-devoured-corporate-america/273732/

      Thirty years ago, the financial sector claimed around a tenth of U.S. corporate profits. Today, it’s almost 30 percent. As a result, it’s supplanted manufacturing as the biggest profit center in the economy, a transformation I’ve graphed out below. The red line is manufacturing. The blue line is the finance sector chowing down like Pac Man on corporate America’s bottom line.

      At the same time, too many U.S. manufacturing companies had become complacent and inefficient. For example, auto manufacturers like GM and Chrysler continued making gas-guzzling automobiles well throughout the 1970s. Japanese imports to the U.S., for example, were far more fuel efficient and durable. The flood of imports severely damaged the U.S. auto industry.

      Also, due to the peculiar U.S. ideology of strict separation of business and state — i.e. very different to that of other countries such as Japan, France, Germany, China (etc.) — meant that the U.S. Government rarely came to the aid of struggling U.S. businesses in vital industries.

      Stan Sorscher said: Workers everywhere have lost bargaining power and wage growth has been decoupled from productivity growth for 40 years, while the number of billionaires has blossomed beyond imagination.

      Ronald Reagan’s war on unions in the U.S. — starting on August 5, 1981, when he ordered that 11,359 striking air-traffic controllers would be fired — led to the loss of many manufacturing jobs and the decline of the middle class.

      Reagan Set Up The Death Of The Middle Class, But China Was The Clincher
      https://ourfuture.org/20140930/reagan-set-up-the-death-of-the-middle-class-but-china-was-the-clincher

      But it wasn’t just globalization, it was the way we did it. In “Why the Economy is Still Failing Most Americans,” Robert Reich notes that Germany has also “globalized” – opened up trade – but has higher wages than we do. Why is this?

      The answer is that we set up trade policies specifically designed to break unions and enrich the owners of corporations. The owners of corporations are pretty much the only players at the table when the U.S. negotiates trade deals. Labor unions, environmentalists, consumer groups and other “stakeholders” are not allowed to participate, and the resulting treaties are pushed through Congress with a rigged “fast-track” process. But Germany worked both with its companies and its labor unions to forge trade agreements that benefit businesses, workers and Germany’s overall economy.

      Globalization isn’t an act of nature; it’s a set of policies, tax, trade, financial, monetary policies where you make choices and those choices benefit parts of the economy and injure others.

      We made choices. Multinationals basically wrote our globalization strategy and they chose to benefit investors, made it easy to ship jobs abroad, made it even easier to threaten to move jobs abroad and dramatically weakened the ability of workers here at home.

      But that was a choice.

      In Germany they made a very different choice where unions were stronger, and the companies and the unions together navigated a globalization strategy that has made Germany one of the great export powers of the world and allows German workers to sustain middle class incomes and benefits.

      Trade policies can help working people and economies. But the U.S. used trade and globalization to enrich a few at the expense of everyone else, our economy and our democracy.

      And:

      With a strong partnership between Industry and Education and with an emphasis on innovation and specialization, Germany has capitalized on sophisticated manufacturing processes with high-skilled workers. The result: Germany exports have held their global market share against China and other emerging countries even as the U.S. share has plummeted (Theil, 2012); Germany manufacturing came out of the financial crisis without a dent in profits or employment even though its workers make 10 times what their Chinese counterparts make (Theil, 2012); and perhaps most relevant to the United States at the moment, Germany has rising industrial employment and an unemployment rate of just 5.6 (Theil, 2012).

      https://www.amazines.com/Business/article_detail.cfm/5864630?articleid=5864630

      Stan Sorscher said: Family farms are disappearing and rural communities are losing their small businesses, schools, and health care facilities, as young people move to population centers in search of economic security.

      Well, the farming crisis in the U.S. appears to be predominantly caused by the choice made in the U.S. of letting multinationals basically writing the U.S. farming strategy.

      How America’s food giants swallowed the family farms
      https://www.theguardian.com/environment/2019/mar/09/american-food-giants-swallow-the-family-farms-iowa

      In 1990, small and medium-sized farms accounted for nearly half of all agricultural production in the US. Now it is less than a quarter.

      As the medium-sized family farms retreated, the businesses they helped support disappeared. Local seed and equipment suppliers shut up shop because corporations went straight to wholesalers or manufacturers. Demand for local vets collapsed. As those businesses packed up and left, communities shrank. Shops, restaurants and doctors’ surgeries closed. People found they had to drive for an hour or more for medical treatment. Towns and counties began to share ambulances.

      Corporate agriculture evolved to take control of the entire production line from “farm to fork”, from the genetics of breeding to wholesalers in the US or far east. As factory farms spread, their demands dictated the workings of slaughterhouses. Smaller abattoirs, which offered choice and competitive prices to family farmers, disappeared, to be replaced by huge operations that were further away and imposed lower prices on small-scale breeders such as the Kalbachs.

      “Investors buy the land, and they have tractors and combines that you can run by computer,” she said. “They’ll hire somebody to sit in a little office somewhere and run that stuff off the computer and farm the land that way. Now what you’ve done is you have lost the innate knowledge of how to grow food and raise animals. You’ve lost a whole generation of it, probably two. Now we are going to rely on a few corporations to decide who is going to eat and who isn’t. We’re one generation away from that picture right now.”

      In Williams, Schutt says he’s seeing a community of owners becoming workers: “It’s going to be like Russia with serfs. If you want to work on a farm, you’ll have to work for them. We’ll give you a job, but you’re going to be working on our terms. We control everything. Small farms can’t survive.”

      …..and:

      Obesity in America: Are Factory Farms, Big Pharma and Big Food to Blame?
      https://www.huffpost.com/entry/the-toxic-triad-how-big-f_b_772729

      The default condition of a human being in the 21st century is to be obese. Nearly 75 percent of Americans are overweight. This is not an accident. Specific, traceable forms of structural violence promoted by Big Food, Big Farming, Big Pharma (see my recent blog on “Dangerous Spin Doctors“) and government polices is leading to the global spread of obesity, diabetes, heart disease and cancer.

      …….leading to a rural opioid epidemic in the U.S.:

      The opioid epidemic is taking its toll on rural America, and it’s hitting farm and ranch families especially hard. The American Farm Bureau Federation and National Farmers Union are joining forces in the fight against opioid addiction with a campaign called Farm Town Strong.

      People are often ashamed or embarrassed to talk about addiction, but everyone needs to be able to openly discuss this problem and face it head-on if we’re going to get help to those who need it—before it’s too late.

      https://www.fb.org/issues/other/rural-opioid-epidemic/

      • Resists learning from the tyranny of Marxism, such as USSR which in seven decades of the grand experiment couldn’t achieve the end it used to justify its oppressive means – feed people, and war-mongering North Korea – which forbids starving residents from accepting food from relatives in Communist China.

    • Um…

      Some US people have benefitted greatly from NAFTA.

      Keep in mind trade is a two-way street, aviation people should especially know that given that for example that about half of Boeing’s product is exported.

      A problem has been bureaucratic complacent companies like the big US steel ones, and gummints such as in Pennsylvania. A Modern Liberal I worked with was scathing about PA for blocking redevelopment. (He’d grown up there.)

      Both companies and unions try to monopolize, as auto workers and the Detroit Three did. But it didn’t work, Japanese automakers introduced quality small cars at good prices. The Detroit Three lobbied against small pickups, duty was added, so the Japanese went upscale to what are now called SUVs, at greater profit. Then onto large pickup trucks.

      Meanwhile, the duty annoyed Europeans, that and their protectionism led to the ‘chicken tax’ against exports of chicken from the US into northern Europe. (Chicken is a low-priced staple in the US whereas in northern Europe it was less common.)

      You should be careful what you ask for.

    • As for farms, that is not the result of trade but of mechanization greatly increasing productivity, but requiring large capital investments.

      There are young farmers today running modest size operations as a business, living on their land, using their brain, farming because they are passionate about it – which helps focus and smarts.

      A problem with farming is that people think it is easy, they get a bit of land then struggle. In reality it is like any other honest occupation – hard. Subsistence farming was common, hopefully less so today.

      And beware of statistics, many small farms are supported by jobs in town, the case where I grew up now that roads are better and vehicles more reliable.

      • @KS

        There is some considerable disagreement as to benefits of ind ag as practiced in the US, in particular with regard to long term viability and quality of produce

        To mention only the prevalence of obesity and exceptionally poor health

        As far as I know the small farmers you mention are now a tiny minority, and unable to earn a decent living

        • I live in the US heartland, what Keith says is basically true in my area. Granted this is some of the best soil on earth, so yield is very high as opposed to some other locations.

          But farmers do quite well and continue to be among the more wealthy citizens, owning quite a bit of land which has a value of its own. They are paid by the government to not plant certain crops as price supports.

          They do work very hard but they also earn a good living. There has not been the corporate invasion that has occurred in less productive areas of the US, where you need very large tracts of land to make a profit.

          • Thanks.

            Land price may vary. I was old by people in Colorado that in the dry area approximately east of Boulder that farmers might get a good crop every IIRC three years, but land was so cheap it worked out. (Of course working the soil and cost of seed and planting it have to be considered.)

            In less developed countries small scale farming may be quite intensive, and land terraced to make use of hillsides. But lots of work. (Cost of labour is a factor in the US and Canada.)

            When my children were young we had a plot in a community garden, amazing how much it produced. But even there, in rich delta soil, it had to be worked, a great difference in second year then even better in third year. And we didn’t charge ourselves for labour. 😉 [Well, we were getting the return in lower grocery costs so effectively were paying ourselves in one sense. I have photos of my daughters holding huge zucchinis or marrows, which grew well there, though the big benefit was in other plants.]

        • I repeat there are modest-size farms doing fine.

          As for obesity etc. I say “Huh?’. That has nothing to do with farming. unless you want to talk of subsistence farming with manual labour that neo-Marxists rail against today and lack of excess food. Rethink!

          • @KS

            Well maybe there are small farms doing fine, but there are very vanishingly few of them

            -very very much fewer than there used to be

            Obesity is the result of ind ag production/fast food chain

            Poor quality food produced with a lot of drugs for the meat and consumed in excessive quantities

            If not from farming/food where could such chronic obesity come from? Surely not from China?

            Travel around the world – whenever a fat white appears the locals will say ‘American’ – now of course the rest of the rest of the world could be wrong

            Did I forget to mention the poor health, too?

          • @KS: does the widespread use of corn syrup in America has anything to do with the U.S. ag. subsidies?

  6. Other commenters here clearly have an axe to grind against the US. I have no response to them because their remarks don’t represent reality.

    The topic of the article was trade policy with China. The goal being to keep markets open in both directions. The same rational as occurs with EU and other trading partners. I support the position expounded here, that China needs to play by the rules and that this involves the WTO.

    But more importantly, it involves negotiating with China on a broad range of issues, the same as is done with the EU. Among those would be an agreement on what are acceptable methods for government support of the commercial aircraft industry, the same as must be negotiated with EU.

    The rest of the issues being dragged in here, are per the usual anti-US sentiment, but don’t pertain to the topic.

      • What I see is people who care about aviation and loved Boeing as it was in the old days under good management. Perfect no, but respected mostly.

        Rather than dismiss critics, its well served to listen to them.

        I worked with some really bad people. They often had very insightful outlook on others.

        Sometimes the views are expressed in on tech terms, but I am fine with that.

        Much like Rob-isms, you just patiently keep explaining that corporate PR is not facts and you can win them over to a more balanced view.

        But the reality is Boeing is a disaster under the last 3 CEO, one failure after another and all at the alter of cost cutting (well and their golden parachutes)

        That is irrefutable fact. While its not exclusive to Boeing as far as corporation behavior goes, it is hugely out of balance.

        The FAA has a very conflicted mission, and that is a fact as well and goes back to the original charter. You can’t be a cheer leader and a regulation enforce at the same time.

        It is the only entity charged with regulation that is also charged with Cheer Leading.

        The one saving grace is the NTSB and you will note it is not part of the FAA. In an attempt to achieve some balance, it also cannot enforce other than via messaging.

        “Before the NTSB, the FAA (then the CAA) independence was questioned as it was investigating itself and would be biased to find external faults, coalescing with the 1931 crash killing Notre Dame coach Knute Rockne.”

        I wrestled many a match and the Cheer Leaders were NEVER referees.

        The ODA loss of authority is an issue (not FAA created but the FAA insists its just fine) . We may see improved regulations (they do not go far enough) but splitting up the FAA has been a topic for a long time.

        Its well past time the FAA gets a pass, it does not deserve it.

        Equally problematic is it regional nature that are independent Fiefs and do what they want as well as managers overriding the very experts it hires to assess. That is plane (pun intended) stupid.

        If you can’t see the problems then its you that has an issue with reality.

        You will note that I disagree with their posting regularly , but I put down facts not corporate of bureaucratic propaganda in doing so.

        You can fool yourself in doing so, but not others.

        And yes, I grew up in the CAA/FAA world. I saw both its flaws and the integrity and hard work and dedication of many (not all) the employees.

        The best employee(s) in the world are only as good as the management allows them to be. You can push the edges a bit but in the end its management and its integrity that allows greatness or a debacles.

        Rightfully no one in the world is going to take the FAA word on certification’s ever again nor accept anything from Boeing without deep scrutiny.

        • I think the US Aerospace industry successfully put massive pressure on congress to streamline, delegate aircraft certification by the FAA. To speed up new development and improve the competitive position of the industry after the 787 financial meltdown.

          The 2012 FAA reform act and following FAA reauthorization took care of where we ended up. Lack of oversight and Boeing at the certification helm. And it was fully, fully supported, cheered by the industry, senators, congress, GAO. They now cooperate to blame the FAA afterall.

          China WTO action is similar to Bombardier & Airbus import tariffs. Trying to lock out competition to avoid confronting your own neglected portfolio strategy.

        • Boeing has more or less given up developing clean sheet aircraft over the last decade in order to use their cash for share purchase and botched the band-aid MCAS software in order to rush out the 737 MAX and avoid expensive pilot training in sim.

          Time for a better, more competent airframe maker to arise.

  7. I agree with the author. It is in my view a stupid policy to deny trade relations. Look, the Chinese are a smart hard working people. GPS navigators, com radios, and instruments aren’t rocket science – and if it were, surely the most recent launch shows them perfectly capable in this regard already. My point being, only an idiot believes the Chinese cannot develop all this on their own. Anyway, I suggest we welcome their trade.

    On the subjects of government ideology; only the ignorant believe the Chinese to be ‘communists’ in the original sense of the word. Similarly, only the ignorant believe America to be ‘capitalist’ in it’s original sense. Basically, both are using a system with aspects of the other – for America’s part, what else would you call the business entity known as a regulated utility than one which suppresses unfettered prices via government input? Bottom line? Neither form of government is perfect and each finds what works for them. Me? I don’t care what Chinese people’s decide because it’s none of my business!

    Back to trade; I just wish we would each find ways to reduce the frictions which result in higher prices. And while I’m wearing my Polyanna-hat, it would be nice if our central banks could work together to find a way to ensure maximum employment and wages for both our peoples so there would be minimal discontent. After all, people with jobs and money to spend have no cause to be unhappy.

    • I do care what China does. Slave labor is one example.

      I have no issue with the Chinese people, but with the tight society control, they are being lead down a path of confrontation.

      Why do we need trade with China? You can get cheap stuff anywhere.

      Quality stuff? You need a different mind set.

      And I am not happy with seeing US money going to enslave people, nor to claim huge amounts of the ocean that is beyond ludicrous (we are in the vicinity, therefor its ours) – and then the claims of China send junks to the the US West coast. Or the claims out to the the third Island Chain (Hawaii)

      Now China is a near Arctic nation (get the drift?)

      We saw what happened to Russia feeding the Nazi machine and China is no different.

      Those who do not learn history are doomed to repeat it.

      So yes its an issue, yes its a dictatorship, yes it violates treaties and has no limits on what and where it claims it owns.

      • You would have to start with stopping trade with the worst country in the world as far has humain wright goes, that is Saudi Arabia. But with american military base there and one of the biggest buyer of miltary and Aerospace american product it will never happen. The USA look the other way as far as human right goes with them.You just have to see what the USA did when Jamal Khashoggi was murdered. Nothing.

    • Potentially some insight into China.

      Some years ago (over 20), I was listening to someone who had recently returned from China having had discussions directly with the General Secretary in China.

      To boil it down to the basics:

      The Chinese leadership had taken note of what happened to Russia after the fall of the Wall. They could see that carrying on with their current system was unsustainable. A form of free market / capitalism / socialism was inevitable. They really, really didn’t want an unscheduled chaotic / lawless transition.

      China would evolve into a form of free market. Competitive ventures would be encouraged, and supported, especially in technological, and scientific areas.

      This would though be done in a very structured, controlled way.

      Looking back on what was said then, this does seem to have some truth to it.

      China is looking after China’s interests, if that’s beneficial to another country that’s fine, but they are not particularly interested if it’s not good for the other country. It’s not surprising there are trade wars that don’t help anyone in the end.

      I agree with John Beech, the Chinese are not really ‘communists’, I think it might be fair to say that they are more of a very closely controlled socialist society.

      Not many communist/Marxist regimes left. Time to engage with Cuba, and Venezuela in a positive fashion, they too in time will evolve into a form of free market economy, well they will if we don’t isolate them as we’ve been doing for a number of years.

      • Venezuela is more capitalistic than most European countries. It is a free market economy. But if the US declares economic war on you than it is necessary to drift into more state intervention. And state have a habit to prepare for the last war so expect a policy of more state intervention to continue after the US flies the white flag.

        ps. A defeat of the Venezuelans is very unlikely. Even with an American invasion.

        • I think Venezuela has some way to go yet.

          It has the largest oil reserves in the world, and I think the 8th largest Natural Gas reserves in the world doesn’t it.

          I don’t understand why there are food shortages, and power blackouts ? It’s people should have an excellent standard of living, their petrol / diesel for instance should be free.

          As far as the US declaring economic war, I don’t understand that comment, for some time the USA had been the biggest importer of Venezuelan oil.

          The problems in Venezuela are more due to mismanagement of / experimentation with the economy than outside forces.

          Nationalising the oil industry hasn’t helped, oil exports are much lower than they were in the past.

          I’ve heard people say that it’s due to sanctions by the ‘West’, but up until very recently (2017 by the current Trump administration) there were no sanctions, the problems pre-date any sanctions. Remember the protests that started in 2014, continued in 2015, 2016, 2017 … are they over yet ?

          The point as with the USA closing China to aerospace suppliers is that it’s all short sighted, countries need to work together, not against each other, and that takes both sides.

          Countries deciding to be inward looking, and look after their own interests without attention to the global market will find life increasingly difficult as more countries take up that model.

          The countries that will ultimately prosper are the countries that don’t try to compete directly against a competitor but rather find a synergistic relationship to work together.

          On balance it’s far better if the USA supplies aerospace parts to China so that a) someone else doesn’t start to supply China b) that China doesn’t have an incentive to become self-sufficient, and produce reverse engineered parts themselves.

          PS. I don’t think the USA is even remotely interested in invading Venezuela

          PPS. Venezuela has what around 10 fighter aircraft SU-30 F-16 ? It’s a very good thing the USA is not interested in invading Venezuela.

          PPPS. I am not an American, I am however a realist, and I have active military experience.

          • The government of Venezuela handling of the economic war with the US has been brilliant. Better than Xi handling of Covid. This has been a big surprise

            But if a country like the US threatens buyers of your products. Makes it impossible for banks who handle dollars to do business with you and pirates ships moving your oil than your economy will be hurt massively. Loosing 60% of your economy is in such a case doing great.

            PS. The US hasn’t won a war since WWII. That is the reason. They want to but know they will loose.

            PPS. Fighter planes are passe. The imported rockets from Iran are the real scare stuff. At least for the unpopular Colombian government. Seeing the Venezuelan flag fly in Bogota is not something they want to see happen

            PPPS. “Realist” who doesn’t know why the economy in Venezuela is so terrible.

      • But that isn’t what Communist China is today.

        You have to ask about each enterprise if it is ‘crony capitalism’ with subservience to The Party essential.

        And residents are oppressed, while the government takes over other countries (Tibet and that area, and islands – with its eyes on Taiwan). And instead of taking Hong Kong as a model for success the regime is going backward.

        That’s the basic regime that earlier deliberately starved people, just like Stalin did in the failed experiment called USSR.

  8. I have to laugh at rockets vs commercial airlines.

    Russia made rockets. North Korea has some serious rockets (and China does)

    None of them has ever had a successful commercial aircraft offering.

    China struggles with commercial engine tech as does Russia (though better at it, RR gave them a nice start as did the Jumo Program)

    So maybe there is something harder about being competitive and tech in airlines? Nahh, can’t be it.

  9. Aug 27 2019 Boeing CEO eyes major aircraft order under US-China trade deal
    Jan 15 2020 Boeing CEO Calhoun: orders from China could resume now that trade deal is signed
    Oct 26 2020 China to sanction Boeing over Taiwan arm sales

  10. A quick note on air shipping of vaccines, the FAA has approved shipping up to 15,000 lbs of dry ice per flight, and/or up to 50% of belly cargo for commercial flights, when used in the approved containers for vaccine shipment. That’s about 5 times more than regulations normally allow.

    The containers use 50 lbs of dry ice each, but the loss rate is only about 3 lbs per day, for a standalone container. So over a 4 hour flight with 15,000 lbs, that’s around 160 lbs loss. It may be less if the containers are packed together, as the surface area is reduced.

    That compares to about 60 lbs produced by 200 resting passengers for the same time period. So it seems like aircraft ventilation would be sufficient, as long as no pockets or buildup can occur. I’m sure ventilation is a consideration in loading & unloading. CO2 and air health detectors are fairly cheap so they can be used for safety.

    Trials are being run all over the world to practice, up to and including simulated inoculation. It’s quite the feat of logistics and organization, similar to a wartime effort. This is for the Pfizer vaccine which is worst-case. It will easily work for all other vaccines.

  11. Reuters: Health officials in many states say that even after the vaccines are approved the rollout to Americans nationwide could be slowed by *shortages of personal protective equipment and other factors*.

    The non-partisan Government Accountability Office reported on Monday that some diagnostic test kits and accompanying reagents, as well as PPE are hard to come by “due to a supply chain with limited domestic production and high global demand.”

    Nov 19: Hospitals in half the states are facing a massive staff shortage

    • Hospitals are only one aspect of the vaccine rollout, but they too have been practicing for some time. Most states are authorizing other healthcare professionals to also give the injection, since it’s low-risk but high-benefit.

      It takes far less staff to vaccinate than to provide hospital care. Many organizations are setting up outdoor drive-through sites. Many are also asking for volunteers for logistical support. I have already volunteered.

      The current staff shortage is related to the surge, which is easing now, with 16 states having already dropped their Rt numbers to unity or below. By the time the vaccine is approved, that number will have improved, with restrictions in place.

      The shortage of PPE is worldwide but it won’t prevent vaccination from rolling out. Hospitals are coping as best they can. The main issues occur for rural locations that lack the buffer capacity of urban areas. The government may need to step in with additional funding and resources for those areas.

      A lot depends on driving down the Rt value to relieve demand and free up resources. Every state has policies in place to do that now. In my state, the peak occurred on November 9th and is now down 30%. The states view vaccination as part of those policies.

      • Strange that BBC and Aljazeera are reporting that Dr Fauci warns of ‘surge upon surge’ of Covid in weeks ahead while inside the U.S. it’s all talk about when sports fans can return to packed stadiums and arenas.

        NYT: Hospitals around the U.S. are short of staff, with little relief in sight
        “[W]hen hospitals were flooded with patients in the spring, medical workers were flown in from across the nation to help”
        “[W]ith the strain being felt nearly everywhere, few hospitals can spare anyone to help in other places”

        Hospitals are braced for Post-Thanksgiving Covid surge

        Quaetz: How a bidding war for Covid nurses hurts tge pandemic response

        Covid-19 surge hitting hospitals “like semi-truck”

        I enjoy the always positive, looking on the brighter side attitude of some here.
        As there’s light far away some believe that’s the end of the tunnel, I just hope it’s not a mistaken freight train rushing near.

        • There may be another surge, yes, it just depends on how many people listened over the holiday weekend. My family did, those I know did.

          But for now the trend is downwards again today. And the notion that a surge would prevent vaccinations is not logical or realistic, since vaccinations are intended to reduce the surges.

          Dr Fauci is not arguing that a surge will prevent vaccination, or discouraging vaccination. But it’s part of the negative vaccine narrative that any negative news at all will be leveraged to imply those things. That has been proved wrong time and again. So it’s important to put out the facts and the truthful view, as I did above.

          The vaccine will roll out successfully. The anti-vaxxers are hard at work, here and elsewhere, to discourage it, but they are also being opposed. The Red Cross will have their own campaign, they too have become concerned about the wealth of disinformation being presented. The Ad Council campaign will begin as soon as the vaccine is approved.

          In the end the negativity won’t matter, as it didn’t for the MAX, because in the real world, objective minds prevail. But it’s important for now to knock down the falsehoods that are presented. Many people involved in that effort now, and they outnumber the negative messengers by 4 or 5 to 1.

          This forum is an aberration, as it is also in regards to attitudes toward Boeing and the US. It’s unfortunate but doesn’t alter the truth for any of those issues.

          • Many in the know has predicted figures for cases and deaths this week may be lowered due to a backlog of testing due to Thanksgiving.

            From CNBC: Dr Fauci wwarnsthe United States is likely to see a “surge upon a surge” of Covid-19 cases after Thanksgiving and heading into Christmas

            Covid-19 cases were already on the rise before Thanksgiving when more than 3 million people traveled through the nation’s airports, marking the busiest travel weekend since lockdown orders hit in mid-March. For weeks, public health experts warned that the looming winter could be the “darkest” part of the pandemic yet.

            Given the number of people who traveled for Thanksgiving and shared meals with family and friends, the U.S. will likely see a “surge upon a surge” of Covid-19 cases in the coming weeks.

            “One of the things that you should keep your eye on is that as we get two to three weeks beyond the Thanksgiving holiday, that it is likely … you’re going to start seeing the curve that had gone to flatten out go back up again, unless people really have done a considerable degree of mitigating,” Fauci said.

            The U.S. is not out of the woods after Thanksgiving. The next 30 or more days will be a period of “precarious risk” as some people begin shopping for Christmas gifts in stores and host parties for New Year’s Eve, Fauci warned.

            Regarding vaccines, states need billions and bilions to distribute vaccine and to educate the public. States are broke now, where’s the money??

          • “In the end the negativity won’t matter, as it didn’t for the MAX, because in the real world, objective minds prevail. But it’s important for now to knock down the falsehoods that are presented.”

            Hmmmmmm, that’s funny – because I remember quite a few times seeing Muilenberg on camera, or reading his quoted response, that the 737 Max was safe and would return in two weeks. In a month. In two months. OK, 3 months. 6 months. It was the pilots fault. Nope – we don’t need extra training. It’s safe. 12 months. On and on…

            Now, almost 20 months later, $20+ billion in hole (and counting), you want to claim that BA was objective and that the negativity didn’t matter?

            To borrow a MNF line; C’mon Man!

          • MAX is recertified for flight, despite the constant and continued criticisms here. The objectivity occurs outside this forum by those who make the decisions, so don’t really expect you to accept or understand. To borrow another Biden term, the views here have turned out to be malarkey.

            Vaccines have had extremely positive results and will be approved, despite the criticisms put forth here.

            Vaccination will take place regardless of any surge, if anything the surge improves the case for vaccination. Despite the attempt to say otherwise here.

            As I mentioned, vaccine planning has been underway for some time. The state role will be in organization and coordination, but the inoculations will be carried out by healthcare groups that have their own funding. Any group wanting to distribute the vaccine is eligible for assistance from the federal CARES act, administered by the CDC.

            And as I mentioned, the surge in my state peaked on November 9th and continues downward, nothing to do with Thanksgiving.

          • Contrary to your post, according to WaPo last week:
            – States are supposed to designate their top five sites capable of receiving and administering the Pfizer vaccine
            – Many states have designated large hospital systems to be the first places to receive vaccines because they have ultracold freezers and can efficiently vaccinate many people.
            – The federal government is paying for much of the delivery and vaccine administration costs. But funding remains a big issue for state and local officials, who are asking Congress for at least $8 billion for vaccination efforts; to date, $200 million in federal funds has been sent to state, territorial and local jurisdictions to help them prepare. Federal officials are sending another $140 million in December.

          • Yes, as I mentioned they can apply for funding under the CARES act. But in most cases, the states will not be inoculating, because they lack the skills and staff and facilities to do so.

            They only need to organize and coordinate at the state level. Where does the vaccine need to be, when, and how much. The states are only the middle managers, they are not the endpoints.

            For the endpoint groups doing the inoculations, they have been gearing up for some time. The notion that no thought or planning or preparation or funding has gone into this is not valid, but is part of the campaign to drive down confidence in the vaccine and the process.

            In my state, 270 healthcare providers have registered as vaccination endpoints thus far. Many of these are chains that have dozens of locations and outlets. In addition, a new registry has been set up for volunteers, you can offer your qualified expertise, whatever it is.

            A lot of this is being worked out in-situ as an unprecedented event, with a short timetable, but it is being worked out, and will continue to be. Our governor said today he wants the population to be confident in the vaccine and distribution process, so will make the distribution and anonymized data public.

  12. BOEING desperately needs chinese orders for some MAX and 777X
    the chinese are in a position ask for some quid pro quo
    key point is help for the painful COMAC 929 certification.
    once this certification is done , selling MAX in China will be pretty hard!
    and anybody can imagine that the 777X will be scrutinized very carefully, wing, engines, etc…
    Marx used to say “Capitalists will sell us the rope wiyh which we shall hang them”

  13. And today it’s reported: Trump’s Covid vaccine czar says side effects ‘significantly noticeable’ in 10% to 15% of recipients

    Vaccine would go first to those of high-priority: essential workers, health-care providers and those considered vulnerable. The majority of Americans probably won’t be vaccinated until *April or May next year.*

    • Yes, April has been the plan for full distribution all along. It’s well documented in the vaccine planning, since at least July.

      The significantly noticeable side effects are headache, fatigue, and slight fever for the first day, and most people will not have these at all. On par with other vaccines.

      But that’s fine Pedro, keep on posting the negative aspects of the information you find, it’s helpful to get it out there and refuted.

      • Rob: The most important thing right now is to focus on reality and keep everyone safe, until late third quarter of 2021 when herd immunity can be achieved thru’ vaccine inoculation, not relax right away because the approval of a vaccine or two!

        • Pedro, we agree at least on safety and the need to maintain precautions through 2021. None of the advocates of the vaccine that I have seen, have said otherwise. All are emphasizing the need for both efforts to continue.

        • @Pedro

          Maybe herd immunity, maybe not : a great part of the US pop say they will not take a vaccine

          Why not? Why are the US people disinclined to take another pharma product?

          Why has every pandemic measure taken so far over 8 /9 months in the US proved so in effective and so divisive?

          Perhaps the pop is looking at these and learning?

          • Concerns about vaccines vary widely, largely driven by word-of-mouth information, and the politicization of the vaccine that has linked it to the Trump re-election campaign.

            Also the view that has been enhanced by the media that the vaccines are rushed, with the implication being they are unsafe. The Red Cross has now weighed in on that, as have Dr Fauci and other experts. That view will improve with time as the vaccine is rolled out.

            At WaPo, a group of subscribers wrote a letter to the paper about the negative coverage. They allege this is linked to the political view that it’s Trump’s vaccine program, and therefore suspect, but it shouldn’t be a political issue, either Democrat or Republican.

            Current estimates are 1/2 to 2/3 willing to take the vaccine now, but there is not enough vaccine at present for that number. So demand will outweigh supply for some months yet.

            There are positive messaging campaigns forthcoming, that will get the facts before the public. This is only waiting for the vaccines to be approved and final distribution plans put in place. That moved substantially forward yesterday with the ACIP and CDC vote on priorities. Those guidelines are now being adopted by states in their distribution plans.

          • Rob

            Tell me this is not true: Trump Spokeswoman Says If It’s Safe to Loot, It’s Safe to Party

          • @Rob

            I don’t know whether I should laugh or cry. It’s just reported that Pfizer cut its vaccine rollout target by half this year. That’s why I emphasize the importance of overall planning and backup, and keep everyone safe for now.

          • Yeppers, that’s our Kayleigh! This is actually among the saner things she’s said. She’s very loyal to the boss, so says what’s she’s told to say.

            It’s going to be a shock (and perhaps a letdown) when the Biden administration comes in, they’ll be quite boring in comparison to the running circus of the last four years.

            Still love Melissa McCarthy chasing reporters with the podium as Sean Spicer, on SNL. Her impression was spot-on. Also using squirt gun, nerf gun and leaf blower on reporters.

          • So Pedro, just to clarify, Pfizer is unable to deliver 100 million doses in the next 30 days, and instead will deliver 50 million in that timeframe. Still a huge accomplishment.

            The problem is due to rejected raw materials ordered for the first batches back in October and November, that did not pass quality control. They cannot replace those materials in the next 30 days.

            However it has no long term bearing on their ability to deliver the vaccine, just in the month of December, and possibly lingering a little longer. A temporary setback.

            So please laugh a little, and please don’t cry.

          • There is skepticism about rushed vaccines. History suggests caution but not avoidance. Each individual should choose based on their risk situation – e.g. someone in bad health but not expected to die soon may want the vaccine, anyone under 45 does not need it unless they have deficient immune system such as from cancer treatment or heart transplant (I know such people).

            Some reports indicate that side effects of the two vaccines first available were survivable, much stronger than with INFLUENZA vaccines but some people had to rest for a couple of days. https://www.cnbc.com/2020/12/01/trump-covid-vaccine-czar-says-side-effects-significantly-noticeable-in-10percent-to-15percent-of-recipients.html?recirc=taboolainternal and https://www.cnbc.com/2020/10/01/coronavirus-vaccine-trial-participants-exhaustion-fever-headaches.html

            Beware of emotionalism and obsessive shotgun policies instead of focusing on where the risks actually are. Do note the huge collateral damage from rash rules – people are dying from delays in surgery and from mental anguish, lives will be shortened by the stress ad poverty of job loss. Aviation people especially should integrate, not that everyone in this forum does.

            And beware of statistics. Media and even government mislead, by blathering cases not deaths, and by not normalizing to population. https://www.aier.org/article/the-medias-covid-war-on-the-dakotas/

  14. I think people with strong opinions on other countries, should visit those countries regularly. It softens, changes strong ideologically, culturally driven believes and truths.

    Nationalism, patriotism requires enemies. If others are doing different, but better, something UnFair must in. Otherwise our believes, values get hurt.

    China’s collectivism, pragmatism, long term view is beating us. Because we protect our individual rights, freedoms. Even if it damages the bigger environment we live in.

  15. Pritchard misses the benefit of process subtleties and of faster learning.

    Aside from political pressure on trade and individual rights including in Hong Kong, which may be Donald Trump’s strategy, remember the US has long had a dog’s breakfast of security sensitive export restrictions, like ITAR/Ewhatever laws.

    And bureaucrats, such as those who claimed that people must have had a license to produce cordless phones using spread spectrum technology to sell them in the US. (Spread spectrum technology was invented by actress Hedy Lamar and partner in the 1930s, though hopefully there have been advances in it since.)

    And those who could not clearly answer the question as to whether or not the a foreign national worker restricted to a particular lab was allowed to go down the elevator and along a hallway to a cafeteria.

    Oh, and how did North Korea get the electronics knowledge to make missiles it will someday shoot at South Korea and Japan?

    • Boeing expects China’s airlines to acquire 8,600 new airplanes (next 20 years) valued at $1.4 trillion and commercial aviation services valued at $1.7 trillion over the next 20 years Why should China totally outward invest $3 trillion dollars instead of developing their own commercial aircraft industry?

        • Beware…in 2018 30% of all 737 deliveries went to China Be careful what you wish for! China could go with in the future a single aisle fleet strategy of A320 and C919

  16. There was a legal case involving UTC, because subsidiary P&WC had sold turbine engines to a Communist Chinese company for a civilian project but some ended up on a military aircraft.

    Though allegations of misleading were probably key to the case.

    Restriction tyrannical regimes is a challenge.

    • Yes, there have been cases brought against Boeing and Lockheed as well, wherein there was restricted technology transfer to China though sales and collaborative projects.

      Both claimed it was not intentional, that the technology provided was not intended for the purpose in which it eventually appeared. But they had overlooked what Scott identified above, the propensity for China to reverse-engineer and copy things, effectively engaging in theft of IP.

      Also for those who may feel that China is moving toward democracy, which was the theory & basis of much Western investment (capitalism & economic freedom will lead to political freedom), I’d point to yesterday’s imprisonment of college students in Hong Kong.

      Their crime was organizing a peaceful protest outside a police station. One of them had been elected to the legislature, but is now effectively removed from political life. She had been barred from taking office by the ruling Communist party executive after winning her election. The courts overturned that decision, so now she has been prosecuted by the same executive and jailed.

      Interesting to contrast that to the US, which pretty much has the opposite case right now. The ruling executive has been voted out, but is trying to stay in power. And may face charges upon leaving office.

      The distribution of power in the two societies could not be more different. And Hong Kong is actually a special case, with perhaps the greatest amount of freedom in all of China. It’s much worse elsewhere. There is no apparent movement or intention by China to democratize, only to benefit from trade with the free world.

      • @Talk War, Trade War then Real War?

        So US investment was made by mistake – just as Covid measures were mistaken, just as…every war the US has fought for the last many years has been a mistake and has been lost

        What else is new

      • China is imprisoning students, Spain is trying to imprison prime ministers. Trying to split of part of a country has that effect.

        Those students are not pro democracy but pro independent. The methods they use can hardly be called pro-democratic. Not unlike that “peaceful” demonstration.

        China and HK are different with freedom of the press. In one you can write critical about the most important man in the country if you do it between the lines. In the other you will be unemployed.

        Power distribution in the US and China is different. In one the government is scared of its population and does mostly what its population wants and the other has a hard police force and does mostly what its elite wants while invading other countries.

        • Democracy could lead to independence if the people vote for it, that’s why it’s suppressed. The Hong Kong movement labeled itself as democratic & pro-democracy. Name is Democisto, will of the people. Not much question about their intent.

          • A democratic China will never let HK leave. HK, which we all know was build on drugs money, racism and theft. It is also fast becoming the undeveloped, poor part of the yellow river delta with soon a fast shrinking population.

            Labeling in politics is not exactly truthful, See North Korea. A demonstrators had a habit to make sure opposing voices were silenced. Not exactly democratic.

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