Monday, November 6, 2017

China Aircraft Exports Cleared for Takeoff Under Federal Aviation Administration Deal: U.S. regulator signs airworthiness certification agreement shortly before Trump’s arrival in China

The Wall Street Journal
By Trefor Moss
Nov. 6, 2017 12:50 a.m. ET

SHANGHAI—Just ahead of U.S. President Donald Trump’s visit to China, the Federal Aviation Administration has signed an airworthiness certification deal that effectively opens the door to Chinese sales of airplanes to the U.S. and other countries.

The agreement boosts Beijing’s hopes of becoming a global supplier of commercial jetliners and of breaking open a market currently dominated by Boeing Co. and Airbus SE .

“It is a really big deal; a milestone in the U.S.-China relationship,” Geoffrey Jackson, executive director of the U.S.-China Aviation Cooperation Program, a Beijing-based body created by the U.S. government and aerospace companies, said of the agreement. The FAA confirmed the agreement on Oct. 27, four days after its announcement by the Civil Aviation Administration of China.

Mr. Trump is scheduled to arrive in Beijing Wednesday, bringing a tough message on the balance of Sino-U.S. trade, which he has long argued is skewed unfairly against America.

In that context, the handing of a major trade prize to China in the lead-up to his visit underscored that cooperating with the Chinese authorities to retain access to the China’s huge aerospace market remains as much of a priority as extracting trade concessions.

“From a symbolic standpoint this is a significant step in U.S.-China trade, and it happened under a president who promised protectionism, particularly with China trade policy,” said Richard Aboulafia, vice president at Teal Group Corp., an aerospace intelligence company.

China has longstanding strategic ambitions to build and export jetliners. The country’s first large commercial aircraft, the C919, developed by the state-run Commercial Aircraft Corp. of China, conducted its maiden flight in May, and is expected to enter service around 2020. The company, known as Comac, already has 300 firm orders for the plane, almost all from Chinese buyers.

But most of the world’s airlines only buy jets that have been certified by credible agencies, notably the FAA and the European Aviation Safety Agency. Until now Chinese certification didn’t count for much outside China itself.

The signing of the new U.S.-China airworthiness agreement changes that, aviation analysts say.

The pact grants China “comprehensive peer recognition” as an aerospace supplier, the CAAC said. Previously, all American aviation products were eligible for use in China, whereas only a handful of Chinese aviation products could enter the U.S.

But now all Chinese-built aircraft and aviation components can potentially be sold to U.S. customers thanks to the “mutual recognition” enshrined in the new agreement, the CAAC said.

Airplanes certified by China won’t automatically be allowed to fly in U.S. airspace, the FAA stressed: “these products are subject to a validation process…defined in the agreement,” which could still include a full technical review.

Even so, the agreement puts China’s aviation authorities on a par with those in Europe, Canada and Brazil, which have similar arrangements with the FAA. It should make it much quicker and easier for Chinese jets like the C919 to gain international recognition.

Major U.S. aerospace exporters such as Boeing, Honeywell International Inc. and General Electric rely heavily on China sales. Chinese airlines already buy roughly twice as many single-aisle planes as their American counterparts, and Boeing expects China to buy 7,420 jetliners over the next 20 years.

Indeed, Boeing confirmed that its newest airplane, the 737 MAX, received Chinese certification just when the FAA signed the airworthiness agreement, freeing the company to start delivering 220 737 MAX jets already ordered by Chinese customers. Boeing delivered the first of those planes to Air China on Friday.

Boeing is set to open a 737 completion center in eastern China—its first overseas plant—next year, recognizing China’s significance as an export market. In September, Airbus opened its first wide-body-jet completion center outside Europe in the northeastern Chinese city of Tianjin, where it already operates a single-aisle-jet assembly line.

The FAA and the CAAC had been discussing the implementation of the airworthiness pact since agreeing to it in theory back in 2005, and Mr. Jackson said signing it had become “inevitable.”

The Europeans are also cooperating more closely than ever with China’s aviation agency. The EASA is working on its own reciprocal airworthiness agreement with China, a spokesman said, and, unlike the FAA, is actively working to certify the C919.

Global demand for jetliners will top 41,000 over the next two decades, Boeing forecasts. As such, “there’s plenty of room in the market for a third player” besides Boeing and Airbus, said Mr. Aboulafia.

The C919 poses little threat to the incumbents, he said. While getting certification for the C919 just got easier, China still has to find buyers for a jet which is technically inferior to rival plans made by Boeing and Airbus, according to Teal Group.

—Kersten Zhang in Beijing contributed to this article.

Original article can be found here ➤


Anonymous said...

Three decades of deceit and deception to transfer key American technologies to China came up for sunshine today. People like Richard Aboulafia, who is criticizing Trump today said nothing when these type of programs were established behind the scene almost 24 years ago. This is more than a symbolic transfer of strategic manufacturing capacity to China, it is truly the mortgaging the future of American Aviation industry for a short term access to Chinese market.

When McDonnell Douglas agreed to assemble MD-80 in China. I had a bad feelings in my stomach that the Chinese will steal the technology while pretending to buy Chinese assembled MD-80. As you know, neither McDonnell Douglas nor MD-80 exits anymore. But their then JV partner has the air frame technology, a modified version of which is just being certified today. Shame on American political establishment for misreading and facilitating wholesale transfer of United States technologies to China.

Anonymous said...

It was bound to happen sooner or later. China is making leaps and bounds in manufacturing and technology (quality has improved dramatically).
Boeing's law staff is probably formulating a strategy to squish this as we speak.

Anonymous said...

Does anyone else feel uneasy flying in a "cheap" aircraft?

Anonymous said...

The American and the Communist Chinese economies continue to be intertwined at an ever-accelerating rate, despite China's occupation of Tibet, territorial belligerence in the South China Sea, support of its Madman Puppet in North Korea, and continuing political oppression of the Chinese people.

Decades hence, our children will inquire "what were you thinking"?