Singapore Airshow: Chinese officials make investment pitches in C919’s afterglow

After China’s home-grown C919 passenger jet made its international debut, government officials are selling air show attendees on industry potential
Representatives from local governments tout incentives, financing plans to boost domestic manufacturing and increase self-sufficiency

China’s C919 passenger plane

Amanda Leein Singapore

Published: 5:42pm, 22 Feb 2024

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China’s local governments took to the stage at the Singapore Airshow on Thursday to attract foreign investment to the country’s burgeoning aerospace industry, riding the jet stream from the maiden appearance of the home-grown C919 passenger plane.

Officials from Langfang, a city in Hebei province near national capital Beijing, and Taicang of the eastern Jiangsu province, gave presentations at the international aviation event, pitching the advantages of China’s aviation sector to attendees.

Their calls for further investment came after the narrowbody C919 passenger jet, manufactured by Commercial Aircraft Corporation of China (Comac), made its first flight outside China for the show.

[We will] make Taicang one of the best destinations for aerospace investment and development

Qian Lili, Taicang Investment Promotion Bureau

Qian Lili, deputy director of Taicang’s investment promotion bureau, said that the global aviation industry is entering “a period of transformation” as a result of the coronavirus pandemic, geopolitical tensions and heightened demand for sustainable development. The city is home to some of the C919’s suppliers.

“Taicang focuses on the high-end, intelligent and green development [of aviation],” Qian said at the China-Singapore Bilateral Aviation Forum, adding that the government is offering a range of benefits to spur activity, including rent reimbursement for talented individuals in the workforce.

Aircraft engines, critical components, materials and airborne systems are all areas of interest for the city, Qian added.

“Taicang will try its best to optimise its business environment,” Qian said. “And [we will] make Taicang one of the best destinations for aerospace investment and development.”

Ding Ling, vice-mayor of the Langfang government and director of the management committee for the Beijing Daxing International Airport Economic Zone, said the city is preparing 20 million yuan (US$2.8 million) for an “industry guidance fund” to finance companies that will help the region meet its goal to build a 100-million-yuan aerospace industry.

As China pivots towards self-reliance and seeks to reduce imports of advanced technology, many local governments have been spending heavily on infrastructure and offering funds to help the country upgrade its manufacturing capability. Aerospace, an investment-heavy sector which has traditionally depended on globalised supply chains, is a major venue for this policy.

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A look inside China’s home-grown civilian passenger jets, the ARJ21 and C919

The C919, which was designed to compete with Boeing’s 737 and Airbus’ A320, took 15 years to build and was the beneficiary of sizeable government largesse. The Centre for Strategic and International Studies, a US-based think tank, estimated in 2020 that Comac could have received as much as US$72.1 billion in state-related support.

China’s extensive use of industrial subsidies has been controversial among trading partners such as the US and Europe, who have said the practice is unfair to foreign companies and creates market distortions. The EU has begun two separate anti-subsidy investigations – one probing electric vehicle imports and another examining a contract for electric trains in Bulgaria.

Hurdles are also fast appearing as China hurries to grow its advanced technology supply chain to hedge against deteriorating relations with the US.

Washington has imposed export curbs on a number of sectors with aerospace applications, limiting activity related to technology which it claims could have both military and commercial uses.

The restrictions have added to foreign investors’ concerns over China’s staying power as a manufacturing hub.

Mabel Kwan, managing director at Alton Aviation Consultancy, said near-shoring strategies by multinationals in the aviation industry is on the rise following pandemic-era supply chain disruptions and changing geopolitical circumstances, but added such an approach is likely to bring about more costs in the short term.

“We definitely anticipate a high-cost environment, because there’s a reduction of skill, and there’s duplicated resources,” Kwan said.