Air Transport World

A tale of two Chinas. (air-transport manufacturing in Taiwan and the People's Republic of China)

There are. of course, two Chinas: The Taiwan island fortress of capitalism that appropriated the name for several decades, and the sole remaining Communist power in the world, the People's Republic of China (PRC). In air-transport manufacturing, the two nations are about as far apart as are their economic philosophies.

There are some common attributes--a fondness for collaborative projects and for McDonnell Douglas, the coming-from-behind manufacturer that in many ways hopes to be the wave of the future for both.

The People's Republic of China does not have a reputation for high-technology products despite the existence of, among other things, a home-grown space program.

On the basis of pure numbers of aircraft built, the PRC aerospace industry must be considered to have some weight--it has been estimated that only four other nations on the planet produce more aircraft. However, most Chinese aircraft in production are for the military and the transports are almost exclusively adaptations of designs originating in the U.S.S.R. before the schism split the two Communist giants in the 1960s. The single independently developed transport is the Y-12, a near-copy of the de Havilland Canada Twin Otter, complete with PT6A turboprops and Collins avionics.

Literally hundreds of manufacturing sites around the nation build aircraft components, roughly 10 of those locations considered major aircraft-manufacturing plants. There is an extensive manufacturing infrastructure dedicated largely to incremental improvements of 1950s-60s technology aircraft.

Taiwan, on the other hand, has a growing high-technology reputation based largely on the development of a consumer-electronics industry. Its fledgling aeronautics industry has produced small numbers of small military aircraft--a trainer and a fighter-- but little civil work and no transports. The aerospace-manufacturing infrastructure is lightweight.

It would seem that the PRC has a substantial lead over Taiwan in assuming a world role in air-transport manufacturing and this would be true as long as money is not considered.

Taiwan has a lot of money; the PRC has little.

Reports have held that the Taiwan Central Bank's foreign-exchange reserves soon will reach $100 billion, probably the largest such reserve in the world. Using a small fraction of these reserves and tapping a building trade surplus, the government of Taiwan is pushing the development of high-technology industries. Seen in this light, the $2 billion discussed for the Taiwanese purchase of 40% of McDonnell Douglas, plus an additional $2-3 billion to finance development of an infrastructure and pay the Taiwanese share of MD-12 development costs, is well within the financial ability of the country. …

Log in to your account to read this article – and millions more.