China will accelerate development of its commercial aerospace sector

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The second of two articles.

By Scott Hamilton

Nov. 21, 2022, © Leeham Co.: Western aerospace companies that invested in China face challenging times ahead in a changing trade environment.

The COMAC C919 is a means to an end in the development of China's commercial aerospace industry. Credit: Leeham News.

This is especially true for US companies. The overhang of trade and political tensions between the US and China makes for difficult times ahead. European companies are less threatened. Nevertheless, these face uncertainties as China strives to build its own commercial aerospace industry.

This effort “puts western companies that have made capital investments in Chinese capacity in a difficult situation just structurally because they have either JVs or WFOES (Wholly Foreign-Owned Enterprises) or other engagements with Chinese-based industrial assets that will be hard to navigate simply from a trade compliance perspective,” says Michael McAdoo, Partner & Director, Global Trade and Investment for Boston Consulting Group.

“Non-Chinese companies now have a very difficult environment to navigate versus a decade ago. I think there will be a huge push to create the capacity, for engines, for airframes, and for key systems.”

McAdoo The C919 essentially was China going shopping basically for what it considered to be best of breed and all these different technologies. The majority of these come from Western suppliers. Then they were integrated into China with some Chinese design and build structures, but even that structure had some western partners at various places.

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