Illustration: Peter C. Espina/GT

China unveiled a prototype of its first homegrown C919 commercial passenger aircraft in Shanghai on Monday. It marks a big step forward for China's civil aviation industry in joining the global aircraft supplier club, and also a breakthrough for China's high-end manufacturing industry.

Building aircraft represents the pinnacle of global high-end manufacturing, and reflects a nation's capability in this area. Worldwide, although many countries have the ability to make aircraft, only Boeing in the US and Airbus - jointly run by France, Germany, Spain and Britain - have become leading global suppliers. The success of Boeing and Airbus comes from their dedicated pursuit of technological progress, as well as the availability of supporting industries and sound management of the global supply chain.

The advantage they have gained in the field and their mature business operating model will be difficult to match. They have also built certain strategic technological and managerial boundaries to lock latecomers out of the market.

Even Japan, one of the top countries in the global manufacturing industry, has not made much headway in building regional and military aircraft.

Russia's civil aviation industry has been increasingly marginalized and has to work with China to develop aircraft due to having fallen behind in technology and management, even though its Tupolev Tu-series aircraft once had considerable market share in the former Soviet Union and some socialist countries.

As for China, developing its aircraft industry can play a key role in building up the national security system. As civil and military aircraft are highly integrated, developing the civil aircraft industry will play a key role in supporting the military aircraft industry. The strategic value of having a self-sufficient military aircraft industry is irreplaceable.

In terms of commercial value, China has seen fast development in business aviation and private aviation in recent years. According to Boeing's estimate, China will need 6,330 new airplanes over the next 20 years, worth around $950 billion.

Chinese airlines currently have only about 2,000 registered long-distance and regional aircraft, with its long-distance airplanes dominated by Boeing and Airbus models while the country's regional aircraft market also features products from Canada's Bombardier and Brazil's Embraer S.A.

Commercial Aircraft Corporation of China (COMAC) has committed to building a new regional passenger airplane, ARJ21-700.

But its delivery has been delayed due to outsourcing restrictions for its key components and difficulties in getting airworthiness certification. Although the model was from the beginning designed in complete accordance with the airworthiness regulations of the Civil Aviation Administration of China (CAAC) and the Federal Aviation Administration of the US (FAA), so far it hasn't gained FAA certification.

Obtaining FAA certification would allow the ARJ21-700 model to be recognized in global markets, and for it to be sold and operated globally. Without it, its market will be limited.

In other words, the core elements of China's civil aviation industry are still largely supplied by the Americans and partly by Europeans.

For the C919 commercial passenger aircraft unveiled on Monday, its core technologies such as engines and electronic devices come from international suppliers such as Safran, GE, Honeywell and Rockwell Collins.

Another issue that cannot be ignored is that even if the C919 can be developed into a complete homemade model with all its core technologies being made domestically by 2025, Boeing and Airbus will have already rolled out upgraded models by then.

Therefore, China's aviation industry needs to improve its systems integration capability if it wants to make technological breakthroughs in key areas such as engines and avionics systems. It needs also to get across the barriers to obtaining airworthiness certification, especially the multiple hurdles set by the US. 

Technological advancement is not the only reason why high-speed rail and nuclear power plants could become China's best business cards in the high-end manufacturing sector - its also because of China's independent R&D capability and more modern management and business models.

Whether China's civil aviation industry can achieve its goals will depend on continuous improvement of technology, management and business models in the country, as well as in the global standards adopted by leading Chinese aircraft firms. But at the same time, the strategies adopted by other countries in the industry will also have an impact.

The author is dean of the School of Economics & Finance at Shanghai International Studies University. bizopinion@globaltimes.com.cn