License to export aircraft engines to COMAC benefits GE: analyst

Source:Global Times Published: 2020/4/8 20:53:40

People visit the stand of US industrial giant General Electric (GE) at the First China International Import Expo (CIIE 2018) in Shanghai, China, 7 November 2018. Photo: IC

US-based General Electric Corp (GE) confirmed to the Global Times on Wednesday that the Trump administration on Tuesday granted a license to the company to supply engines for China's C919 commercial passenger jet.

An analyst said that the export permit will ease pressure on the US enterprise amid the COVID-19 pandemic.

"The US has always followed the principle of 'America First'. The US' decision to allow GE to export engines must, first and foremost, satisfy its economic interests. It is also the result of a partisan game, and a good result for China. No matter what the US' purpose is, I hope that the move can ease the China-US relationship and the trade decoupling trend," Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute, told the Global Times on Wednesday.

GE's license to export its engines for the narrow-body jet of Commercial Aircraft Corp of China (COMAC) was up in the air earlier this year, as the US government was weighing whether to grant approval.

"Given the certainty of an economic recession in the US and the impact of the COVID-19 outbreak, the US has to take steps to boost its economy. The export of aircraft engines is 100 percent good for US companies, easing the pressure on orders," said Bai.

The international aviation industry is among the hardest-hit sectors amid the pandemic. The market and industry chain of GE, the huge manufacturer, is threatened as well.

The International Air Transport Association (IATA) estimated in March that global airline capacity would fall 14 percent on a yearly basis in the first quarter of 2020, down 65 percent in the second quarter, 33 percent in the third quarter and 10 percent in the fourth quarter.

"The US has adopted two major policies toward China — one is blockade, the other is market occupation. For example, the chip export blockade was delayed several times because US chipmakers do not want to lose the Chinese market. The example of GE exporting engines is actually a market occupation. If the US does not export engines to China, the country can buy Russian or French engines, or develop its own engines," Bai added.

According to a previous IATA report, China will surpass the US in terms of inbound and outbound international flights and domestic passenger traffic, and thus it will become the world's largest aviation market by 2022.

"The US will not be willing to lose such a huge aviation market," Bai noted.

Global Times

Posted in: COMPANIES

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