US aerospace firms eye China for growth

By Ananth Krishnan  |   2008-11-3  |     NEWSPAPER EDITION

EVERY industry might now be feeling the pinch of the global financial crisis, but few have been worse affected than the aviation sector.

In recent months, airline closures, lay-offs and delays in aircraft deliveries have been making the news in an industry reeling from the double impact of oscillating oil prices and the financial crisis.

So while this might seem a strange time for a delegation of some of the United States' most well-known aerospace firms to arrive in China looking to invest, the US aerospace industry is increasingly looking at China's aviation sector as an investment opportunity that might help them tide over their current troubles.

"There is a growing belief that the development of (aviation) markets in Russia, China and India will play a role in reducing the impact of the current crisis," said Francis Chao, managing director and publisher of the 'China Civil Aviation Report,' who is also a senior consultant to the delegation.

The mission is the first ever bilateral exchange between the world's two biggest aviation markets. In visits to Shanghai, Beijing, Suzhou and Guangzhou this week, US firms will meet local aviation companies and distributors, looking for joint-venture partnerships and supplier opportunities.

"In China, the aviation market has been growing very fast," Chao said. "It ranks second in the world for turnover, though there is still a big gap between China and the US. But it will continue to grow, as China needs a lot of regional airports and regional aircraft. China will build its own aircraft and have its own supply chain and capabilities. So it makes sense for US companies to have joint ventures here, and work with and help local manufacturers."