Aviation upgrade led by COMAC could help inspire wider manufacturing renewal

By Xiao Xin Source:Global Times Published: 2017/5/11 22:23:40

The successful maiden flight of China's first domestically built jetliner is not just a huge step toward realizing the nation's aviation ambitions. It may also kindle hope for the upgrading of the country's manufacturing across the board.

Commercial Aircraft Corp  of China (COMAC) is the State-owned manufacturer of the C919, the passenger jet that has catapulted China into the ranks of the handful of countries that have developed their own large jetliners. And the company is now planning to set up an investment firm, Shanghai Securities News reported on Thursday. The firm will create an investment fund of more than 10 billion yuan ($1.45 billion) to prop up the supply chains needed for large jetliners, said the report.

Unidentified staff with COMAC were cited as saying that initial investments will focus on developing homegrown airplane structural components including power plants, control surfaces, fuel systems and electronic equipment. 

Such an effort will be expected to funnel funds back into the country's stagnant manufacturing sector and ease some of the woes affecting it.

New evidence of the lack of momentum in China's manufacturing sector came when the official Purchasing Managers' Index (PMI) for April was announced by the National Bureau of Statistics. The index slipped to a six-month low of 51.2, a worrying trend, even if it was still above the demarcation line of 50 that separates expansion from contraction.

The Caixin/Markit Manufacturing PMI, which is weighted toward smaller private businesses, painted an even grimmer picture, falling to a seven-month low of 50.3 in April.

It's generally accepted that moving the country toward higher-end manufacturing is the best way forward. Nevertheless, a transformation like this involves mammoth amounts of research and development, which is simply not possible for many small manufacturers that are struggling to survive amid funding difficulties and waning demand.

In this sense, with its investment arm in the pipeline, COMAC could offer a vital platform and springboard, enabling many other businesses to achieve their own upgrade. It could be said that China's aviation ambitions will push the whole country's manufacturing upgrade and exemplify a Chinese development mode that will always help facilitate breakthroughs. Similar platforms could spring up like mushrooms with the likes of COMAC serving as the mainstay of the upgrading efforts, providing a tailwind for a great number of smaller manufacturers to climb up the industry ladder.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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