Sunday 31 May 2009

Chinas AVIC Makes Moves to Expand and Develop

State-owned Aviation Industry Corp of China (AVIC), the countrys leading aviation manufacturer, launched a helicopter company in Tianjin Binhai New Area with the local government on Thursday, the China Securities News reported. With a registered capital of RMB 8 billion, the newly-established company is named AVIC Helicopter Co.

In associated news, AVIC says it will recruit its first executives from abroad an unprecedented step for the secretive world of Chinese military contractors amid efforts to create a commercial aerospace supplier to compete with Boeing Co. and Europes Airbus. Aviation Industry Corp. of China, which makes Beijings fighter jets, is pushing ahead with aggressive business plans despite global financial turmoil. It got a 176 billion yuan ($26 billion) credit line from state banks in January to develop a 150-seat jetliner. It test-flew a smaller commercial jet in November and is building Chinas first helicopter factory.

Comment: These two news stories are signs that AVIC will become a lead player in the global commercial sector. And those commercial technologies will work their way into the military sector, of that there can be no doubt.

  • Chinas AVIC Continues Expansion and Launches Three Beijing Subsidiaries
Aviation Industry Corporation of China (AVIC), the countrys leading aviation manufacturer, signed a framework agreement with the Beijing municipal government on March 2 to establish three subsidiaries in Beijing with a total investment of 21 billion yuan ($3.07 billion).
The airplane engine company and composite materials research and development center will be located in Shunyi district, about 30 kilometers northeast of central Beijing. The Beijing government has been promoting the district, where the Beijing Capital International Airport is located, into an aeronautic industry zone.
The airborne systems company will be located in the Zhongguancun Aviation Science Park of Haidian district.
AVIC has been consolidating its diverse businesses after the merger of Chinas State-owned aviation manufacturers, AVIC I and AVIC II, last year. AVIC now has six subsidiaries across the country specializing in different businesses. The six companies are respectively involved in transporters, airplane engines, helicopters, general aviation, airborne systems and aviation imports and exports.
AVIC said in January that the helicopter company will be located in Tianjin. The Tianjin municipal government will hold a 31 percent stake in the company.

Comment: Despite the global economic downturn which has forced aerospace and defence companies to slow expansion, AVIC is accelerating expansion driven by the Chinese governments commitment to modernise its air force capabilities as well as its commercial jet airliners.

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