This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/25/2017

Overview
Aircraft, Spacecraft, and related parts (HS Code 88) Unit: USD millions

 

2014

2015

2016

Total Exports

2,704

3,484

3,454

Total Imports

28,503

28,004

22,791

Imports from the U.S.

15,517

17,622

13,237

U.S. share of total imports

54%

63%

58%

Source: World Trade Atlas

China is the world’s second largest and one of the world’s fastest growing civil aviation markets. The industry has grown at double-digit rates for several years.  Commercial opportunities in China’s civil aviation market include commercial aircraft, engines and parts, MRO (Maintenance, Repair and Overhaul), airport, and general aviation, among others.

China’s aviation industry is a national priority, and the Chinese government is expending significant resources to develop domestic manufacturing capabilities, build new airports, train new pilots, and increase domestic maintenance capacity.  China is one of the largest overall export markets for U.S. aerospace products.  The U.S. aviation sector exported $13.2 billion products to China in 2016, accounting for 58 percent of China’s total imports in the aviation sector.

In 2016, China's civil aviation transportation turnover reached a total of 96 billion tons km, passenger transport volume reached 490 million persons, and cargo transport volume reached 6.67 million tons; this was an increase of 12.8%, 11.8%, and 6%, respectively, from 2015. China’s top three airlines—Air China, China Southern, and China Eastern—are already among the world’s top 10 carriers in terms of passenger volume.

By the end of 2016, the number of civil aircraft in China increased from 4,554 to 5,037, and civil airports increased to 218.  The number of airports able to accommodate passenger traffic in excess of 10 million persons reached 28.  Beijing, Shanghai and Guangzhou occupy 26.2% of total passenger throughput in mainland China, of which Beijing reached 90 million and Shanghai’s two airports reached 100 million in 2016.  According to China’s 13th Five Year Plan (2016 – 2020), China will have more than 260 civil airports by 2020.

By the end of 2016, the number of general aviation aircraft reached 1,472 and China had more than 300 general aviation airports.  China currently has a total of 224 general aviation companies, with the total number of general aviation pilots at 2,524.  There are currently 20 pilot training schools in China.  By 2020, China plans to have 500 general aviation airports and more than 5,000 general aviation aircraft.

The expansion of China’s aviation market creates both opportunities and challenges for U.S. companies. Commercial opportunities in the civil aviation market include final assembly and tier-one suppliers, small niche parts manufacturers, airport design and construction companies, MRO, and general aviation among others. However, since aerospace manufacturing is a national priority in China, U.S. companies may face substantial localization pressures or may be disadvantaged by government policies favoring local firms.
 
Leading Sub-Sectors
Aircraft Parts: Manufacture and Repair
Aircraft parts (HS Code 8803) Unit: USD millions

 

2014

2015

2016

Total Imports

2,338

2,151

2,192

Imports from the U.S.

714

726

651

U.S. share of total imports

31%

34%

30%

Source: Global Trade Atlas
 
China is working to develop a globally competitive manufacturing industry.  The industry sees strong growth in China's aviation sector over the long term.

China’s import market for aircraft parts and components exceeded $2.19 billion in 2016, of which imports from the U.S. accounted for 30 percent. China’s demand for aircraft parts can be attributed to a number of factors including increasing capacity utilization rate, the aging and expansion of China’s aircraft fleet, and the domestic production and assembly of aircraft.

Boeing predicts China will need 5,110 new single-aisle airplanes through 2035. This sector is driven by growth in new carriers and low-cost airlines in developing and emerging markets, as well as continuous expansion in established airlines.

New Airplane Deliveries to China Through 2035

 

Airplane type

Seats

Total deliveries

Dollar value

Regional jets

90 and below

140

$10B

Single-aisle

90-230

5,110

$535B

Small wide-body

200-300

870

$240B

Medium wide-body

300-400

630

$220B

Large wide-body

400 and above

60

$20B

Total

-----------

6,810
(17% of world total)

$1.025T
(17% of world total)

Source: Boeing’s China Current Market Outlook 2016

U.S. companies are important suppliers of aviation technology, services, and know-how and have committed significant resources to help China reduce its capacity constraints and fulfill a wide variety of training needs.  The best immediate opportunity for U.S. companies will be in supplying parts for China’s commercial aircraft fleet. It is the largest and best-established segment of China’s aviation market and is currently dominated by western aircrafts with many U.S. suppliers.  U.S. companies are also key partners for China’s own commercial aircraft programs including the Commercial Aircraft Corporation of China’s (COMAC) ARJ21 regional jet and C919 narrow body civil aircraft and the Aviation Industry of China’s (AVIC) MA700 m. U.S. companies also  have much to offer as partners in developing China’s fledgling general aviation industry.

China’s domestic aircraft parts and assembly manufacturing sector is also growing. In addition to approximately 200 small aircraft parts manufacturers, there are also a number of regionally-based major manufacturers concentrated in Shanghai, Chengdu, Xi’an, Nanchang, Harbin, Shenyang, and Shijiazhuang.  China’s domestic manufacturing base is developing, as reflected by the commitments of large aircraft and engine manufactures to expand procurement in China over the long term.  For example, over 8,000 Boeing airplanes fly throughout the world with integrated China-built parts and assemblies.  China has components on every current Boeing commercial airplane model – the Next-Generation 737, 747, 767, 777, as well as the 787 Dreamliner.  However, most highly technical and sophisticated parts will continue to be imported.
 
 
Opportunities
Airports
China currently has 218 civil aviation airports, including the world’s second busiest in Beijing, with plans to expand aggressively to more than 260 airports by 2020.  The following table shows China’s top 28 airports with annual passenger throughput of 10 million or more.
 

Airports

Passenger Throughput

Rank

2016

2015

Year-to-Year %

Total of All Chinese Airports

 

1,016,357,068

914,773,311

11.1

Beijing/Capital

1

94,393,454

89,939,049

5.0

Shanghai/Pudong

2

66,002,414

60,098,073

9.8

Guangzhou/Baiyun

3

59,732,147

55,201,915

8.2

Chengdu/Shuangliu

4

46,039,037

42,239,468

9.0

Kunming/Changshui

5

41,980,339

37,523,098

11.9

Shenzhen/Baoan

6

41,975,090

39,721,619

5.7

Shanghai/Hongqiao

7

40,460,135

39,090,865

3.5

Xi’an/Xianyang

8

36,994,506

32,970,215

12.2

Chongqing/Jiangbei

9

35,888,819

32,402,196

10.8

Hangzhou/Xiaoshan

10

31,594,959

28,354,435

11.4

Xiamen/Gaoqi

11

22,737,610

21,814,244

4.2

Nanjing/Lukou

12

22,357,998

19,163,768

16.7

Changsha/Huanghua

13

21,296,675

18,715,278

13.8

Wuhan/Tianhe

14

20,771,564

18,942,038

9.7

Zhengzhou/Xinzheng

15

20,763,217

17,297,385

20.0

Qingdao/Liuting

16

20,505,038

18,202,085

12.7

Urumqi/Diwobao

17

20,200,767

18,506,463

9.2

Haikou/Meilan

18

18,803,848

16,167,004

16.3

Sanya/Fenghuang

19

17,369,550

16,191,930

7.3

Tianjin/Binhai

20

16,871,889

14,314,322

17.9

Harbin/Taiping

21

16,267,130

14,054,357

15.7

Dalian/Shuizhuizi

22

15,258,209

14,154,130

7.8

Guiyang/Longdongbao

23

15,105,225

13,244,982

14.0

Shenyang/Taoxian

24

14,967,228

12,680,118

18.0

Jinan/Yaoqiang

25

11,616,914

9,520,887

22.0

Fuzhou/Changle

26

11,606,446

10,887,292

6.6

Nanning/Wuxu

27

11,559,860

10,393,728

11.2

Lanzhou/Zhongchuan

28

10,897,025

8,009,040

36.1

Subtotal

 

804,017,093

 

 

(Source: CAAC website)

The airport system at present is highly concentrated, with top airports suffering from major congestion. The top three airports - Beijing, Shanghai, and Guangzhou - account for 26.2 percent of all traffic, while the top 28 airports with annual passenger throughput over 10 million handle 79.1 percent of total traffic nationwide.  Local industry estimates indicate that about 25 percent of China’s airports are already at or near capacity.

According to the Civil Aviation Administration of China (CAAC)’s 13th Five Year Plan (2016 – 2020), China will continue major new airports’ construction including Beijing New Airport (the largest new airport project under construction) and start 44 new airport construction projects including Chengdu New Airport (the 2nd largest new airport project in China).  This presents tremendous opportunities for U.S. companies to sell equipment and services from airport design and construction to air traffic management and environmental consulting.

Qualified companies can bid for design, consultation, surveillance, management, and construction of designated civil airport projects.  In particular, companies that provide the following equipment and services to airport development have great opportunities:   airport design, green construction, energy efficiency equipment, airport security equipment, ground support and terminal related equipment, and airport management.
 
General Aviation (GA)
In China, airspace is tightly controlled by the Chinese military and the airspace classification system does not segment out its GA air activities. Strict military control over roughly 70 percent of all Chinese airspace is the largest single factor limiting growth of this industry. GA is still underdeveloped in China in terms of aircraft numbers, professionals, and facilities.

China is a growing market for business aircraft, helicopters, and other general aviation aircrafts. By the end of 2016, China had 1,472 general aviation aircrafts, more than 300 general aviation airports, and a total of 224 general aviation companies. The total number of general aviation pilots reached 2,524; and pilot training schools reached 20.

Although the total number of GA companies, the size of the fleet, and flight hours are still relatively small, the potential importance of this industry to the Chinese economy in the long-term has led aircraft OEMs and Chinese government officials to devote significant resources towards capacity-building for general aviation. According to CAAC, Chinese GA OEMs located in Guangdong, Shandong, Hunan, Henan, Hebei, Liaoning, Chongqing, and other provinces have put into operation 17 types of GA aircraft and helicopters that are in line with airworthiness standards. China has initially formed a GA industry structure that includes GA equipment manufacturing, GA operation, maintenance, GA airport construction, air traffic control services, and financial services.

The government has committed to gradually open access to low-altitude airspace and streamline the examination, approval, and record-keeping requirements for general aviation flights.  A welcome change came in November 2010 when civilian and military authorities issued a joint reform document calling for liberalization of low altitude airspace under 4,000 meters (13,000 feet), setting the goal of opening up airspace below 3,000 meters by 2020.  There is a three phase plan to deregulate G.A. airspace, beginning in pilot cities of Shenyang, Guangzhou, Hainan Island, Changchun, Tangshan, Xi’an, Qingdao, Hangzhou, Ningbo, Kunming, Chongqing. The plan is currently in Phase Two, with airspace under 1,000m now accessible to General Aviation aircrafts in these cities.

Since then, GA has been developing at a fast pace with new players joining the market and local governments getting involved. GA has big market potential driven by the state and local economic development plans, public demand for business jets, and the need for public services and individual recreation. Recent GA progress has been made on loosening regulations on low altitude airspace to enable safe and efficient operations of small aircraft and on simplifying permitting procedures for general and business aviation operations.

CAAC announced its 13th Five Year Plan on General Aviation Development. By 2020, China plans to have more than 5,000 general aviation aircrafts and 500 general aviation airports, and annual flight hours will reach 2 million hours. To facilitate that expansion, it has lowered the approval level for airports from the central government to the provincial governments, and it will encourage private investment in building airports.

A plan is in place to free up more airspace, gradually raising the observation altitude, under which pilots need not file a restrictive flight plan, to 3,000 meters (9,840 feet) from 1,000 meters (3,280 feet). Those parameters are more in line with international convention.  Massive changes to China’s general aviation infrastructure and policies are ahead after May 2016 initiatives announced by the Chinese State Council.  In acknowledging that general aviation is vital to the country’s transportation system and is just as important as commercial aviation, the State Council named general aviation the next engine to drive the Chinese economy.
 
Helicopters
With the rise of the GA market, China could become the fastest-growing helicopter market in the world.
For a country similar in geographical size to the United States, China currently operates comparatively few helicopters, most of which are built abroad. But with demands growing in both military and civil sectors, change is on the horizon for China’s relatively small helicopter industry. The main civil helicopters are supplied by Airbus Helicopters, Sikorsky Aircraft Corporation, Bell Helicopters, Agustawestland Helicopters, Russian Helicopters, Robinson Helicopter, and Kaman Helicopter. The major local suppliers are AVIC Helicopters, AVIC Harbin Aircraft Industry Group (AVIC HAIG), and AVIC Changhe Aircraft Industry Corporation (AVIC CAIC).  The Chinese government has loosened its control on helicopter manufacturing to allow local private firms and foreign companies to cooperate in developing and manufacturing civil helicopters. For example, in 2013, Chongqing Helicopter Investment Co. acquired Enstrom Helicopter Corporation and entered the Chinese market.

As of 2016, China’s fleet of civil helicopters reached more than 700 in total. Over the next ten years, China’s civil helicopter needs are expected to rise to about 1,500 helicopters. China has realized the importance of helicopters for disaster relief work and medical rescues, and the country has become a bright spot in the struggling helicopter industry.  The growing Chinese economy provides a huge potential market for helicopters of all classes.
Below is a partial list of best sales prospects:

 
Air Data & Inertial Reference System (ADIRS)
Airfield buses
Automatic Flight Control System (AFCS)
Auxiliary power unit, door system
Avionics               
Bearings
Baggage sorting systems and handling equipment
Baggage x-ray machines
Crew seats  
Composite Materials
De-icers/ Refuellers
Electric power system
Emergency evacuation equipment
Engine vibration monitoring system
Flight Data Recording System
Flight Control Actuation System
Flight deck control suite 
Fire fighting vehicles
Fire protection equipment
Food loaders
 

 
Fuel hydraulics
Fuel System
Fuel Tank Inserting System
High Lift System
Hydraulic System
Integrated flight deck panel
Integrated Supervise & Control System
Interior components      
Landing gear        
Lighting equipment
On-board Maintenance System
Oxygen fuelling vehicles
Radio remote control apparatus
Runway friction testers
Pilot training
Signalling & Safety equipment for airfields
Telecommunication and Navigation System
Towing tractors
Turbofan Engines
Windshield heater control & wiper system
Windshields and opening windows
 

 
Close aviation partnership between the U.S. and China continues to flourish. The U.S. Federal Aviation Administration (FAA) and the Civil Aviation Administration of China (CAAC) have had a close partnership for many years. The American Chamber of Commerce China-affiliated U.S.-China Aviation Cooperation Program (ACP) brings together U.S. industry and government agencies from both countries, notably CAAC, FAA, the U.S. Trade and Development Agency, the U.S. Embassy, and the U.S. Transportation Security Administration, in a unique and active forum for bilateral cooperation.  Efforts to reduce constraints on the healthy and sustainable development of civil aviation in China have been largely successful.

U.S. firms without an existing China presence may want to consider hiring a local distributor or representative. Such partners generally help establish access to decision makers and gain timely commercial information about the market. They also traditionally leverage personal connections to promote U.S. products and develop sales leads. While this is a common global practice, successful exporters comment on the need to invest significant time and attention to maintaining and managing relationships with Chinese partners. Some U.S. firms decide to enter into a Joint Venture (JV) relationship with Chinese partners, exchanging technological know-how for market access. This should only be done after significant due-diligence and cost/benefit analysis.

U.S. firms often use training programs to establish productive partnerships with Chinese clients.  Industry associations such as the U.S.-China Aviation Cooperation Program (ACP) can serve as valuable vehicles for American firms to leverage similar opportunities.

Challenges
While the trend to reduce barriers on the sustainable development of civil aviation in China has been largely successful, challenges remain.  Further systematic efforts are needed to open up and modernize China’s airspace system, reduce inefficiencies and congestion, realize environmental benefits from the adoption of new technologies and procedures, and accommodate growth.

Reforming China’s Airspace System and Improving Operational Efficiency
Reforming China’s national airspace management system is critical to meeting China’s aviation growth, enabling improved system efficiencies and reducing the environmental impact of the aviation industry.

The surge in air traffic has significantly increased demands on the country’s large and complex airspace system. Although the system has a world-class safety record and continues to grow in passenger and cargo aircraft operations, it exhibits signs of stress, including persistent delays at airports nationwide and a continuing shortage of slots. These delays and slot shortages are due primarily to the limits placed on the use of China’s national airspace for civil aviation purposes, inefficiencies in airspace operations, capacity management that relies on a command and control structure, and ripple effects from the resulting congested airspace when arriving at or departing from airports.
 
Trade Events
Air Show China 2018
Nov. 6-11, 2018 • Zhuhai, China •
China International Aviation & Aerospace Exhibition (Airshow China or Zhuhai Airshow) is the only international aerospace trade show in China endorsed by the Chinese central government. It features the display of real-size products, trade talks, technological exchange and flying display.  Since 1996, the show has been successfully held in Zhuhai in every even-number year for 10 sessions.
 
2017 China Civil Aviation Development Forum
May 25 - 26, 2017  Beijing
China Civil Aviation Forum is designed to serve as a high-level communication platform for global aviation leaders. It is hosted by the Civil Aviation Administration of China and organized by the Civil Aviation Management Institute of China. It focuses on long-term trends and hot issues and discusses strategies for the development of civil aviation industry. Since its beginning, the forums have proved a series of success, greatly promoting communication among the aviation communities at home and abroad.
 
China Helicopter Expo
September 14 - 17, 2017   Tianjin 
 
China International General Aviation Convention (CIGAC)
October, 2017  Xi’an, China 
Sanctioned by Chinese State Council in 2009, China International General Aviation Convention (CIGAC) is so far the largest general aviation event of its kind in China.  CIGAC is held biennially in Xi’an featuring a spectrum of Air Show and Static Display, Exhibition of Aviation Equipment and Accessories, Summit and Seminars, and Project Promotion Session together with a series of Signing Ceremonies.
 
 
Web Resources
Government Authorities
Civil Aviation Administration of China (CAAC)
Air Traffic Management Bureau:
Center of Aviation Safety Technology
 
Airlines
Air China
China Eastern Airlines
China Southern Airlines
Hainan Airlines
Sichuan Airlines
Xiamen Airlines
Shenzhen Airlines
 
Aircraft Manufacturers
Aviation Industry Corporation of China (AVIC)
Commercial Aircraft Corporation of China (COMAC)
 
MRO Facilities
Aircraft Maintenance and Engineering Corporation (AMECO)
Guangzhou Aircraft Maintenance Engineering Co. (GAMECO)
Shanghai Technologies Aerospace Co. (STARCO)
Taikoo Aircraft Engineering Company Limited (TAECO)
MTU Maintenance (Zhuhai)
Sichuan Services Aero-Engine Maintenance Company (SSAMC):
 
Aircraft Trading Companies
China Aviation Supplies Corporation (CASC)
 
 
Other
CAAC news
ACP
U.S. Commercial Service Contact for Aviation Sector
 
U.S. Embassy in Beijing
Ida Peng, Senior Commercial Specialist
(86 10) 8531 3947; aiqun.peng@trade.gov
 
U.S. Consulate in Shanghai
Stella Chu, Senior Commercial Specialist
(86 21) 6279 8726; stella.chu@trade.gov
U.S. Consulate in Chengdu
Cui Shiyang(Sonny), Senior Commercial Specialist
(86 28) 8598 6546; cui.shiyang@trade.gov
 
U.S. Consulate in Guangzhou
Roya Xie, Commercial Specialist,
(86 20) 3814 5000 ext.5807; roya.xie@trade.gov
 
U.S. Consulate in Shenyang
Dongmei Sun, Commercial Specialist
(86 24) 2322-1198; dongmei.sun@trade.gov

 

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More Information

China Aviation Trade Development and Promotion