Public Information on Trade with China
12 JULY 2004
Primus International, a US firm, has launched
a project to manufacture aircraft components, kits and assemblies
as part of its strategy to take a share of China's aerospace industry.
A factory will be built at a cost of $l0 million but manufactures
must now include raw materials imported from the US which are
not available locally. Output will be exported to manufacturers
of commercial and regional jets in the US, Japan, Brazil, S. Korea
and Europe. The strategy is leading to joint ventures with the
Chinese aerospace industry that will lead to domestic sales.
CITIC Offshore Helicopter Co. Ltd. said it has
signed a contract with Eurocopter and Hong Kong-based Samwell
Aviation Ltd to become strategic partners for the promotion, operation
and maintenance of Eurocopter's helicopters in the Chinese market.
The deal involves some technology transfer from Eurocopter to
CITIC Offshore.
Power Projects
Also on the civil side, China's Three Gorges
Project Group has signed contracts worth Rmb4.54bn ($546m) to
purchase twelve new hydropower generating units. Contracts for
four units were awarded to Alstom of France, but two domestic
companies, Harbin Electric Machinery (HEM) and Dongfang Electric
Machinery (DEM), will supply the remaining units.
To fulfil the contract, HEM and DEM will make
use of foreign technology from a technology transfer that began
in 1997 when fourteen generators were purchased from foreign companies
for the left bank of the project. In that purchase order, the
foreign firms agreed to transfer related technology to China for
a total of US$18m. According to a country briefing from the Economist
Intelligence Unit the company will look for similar cost savings
when it builds the four hydropower stations planned for the Jinshajiang
River, a tributary of the Yangtze.
26 JULY 2004
CHINA AGREES TECHNOLOGY TRANSFERS FOR ENERGY
SECTOR
ABB will build a 1,100-kilometer-long (682 miles)
3,000-megawatt high-voltage .transmission link under a $390 million
contract awarded by China's State Grid Corp. The equipment will
partly be manufactured by ABB factories in Sweden and Switzerland
though valves, some transformers and gas-insulated switchgear
will also be assembled or produced by Chinese partners, the company
said. There will also be technology transfer.
Areva, too, won two co-operation agreements
with Chinese power groups. "Areva is very well positioned
because we have already built four nuclear sites in co-operation
with the Chinese. We have had technology transfers that have functioned
well, and we are ready to continue," Areva's CEO, Anne Lauvergeon,
said.
25 OCTOBER 2004
BOEING AWARDS CHINA 747 PARTS PRODUCTION
CONTRACT
China's Xi'an Aircraft Industry Company will
supply floor beams for Boeing's 747-400 Special Freighter, a programme
to convert passenger airplanes into freighters. A Boeing spokesman
told CTO that any time the company has a supplier agreement with
another company Boeing considers it to be industrial co-operation.
To date Boeing has placed about $500m of work in China (since
1972) and expects that to more than double by the end of the decade.
"It would amount to a relatively small
percentage of the aircraft. We have supplier agreements with five
or six different organisations within China and a number of sales
agreements with airlines. The sales agreements are not part of
the industrial co-operation programme," the spokesman said.
Parts coming out of China have been installed on about 3,400 global
Boeing airplanes, about one third of all passenger aircraft.
Jim Morris, Vice President of Supplier Management
for Boeing Commercial Airplanes, said Xi'an Aircraft is a well-established
Boeing supplier partner that currently builds trailing edge ribs
for 747 wings and recently celebrated delivery of the 1,000th
737 vertical fin. "China has a significant role working together
with Boeing, and this is one more step in increasing and strengthening
our partnership," Morris said.
China Eastern Airlines Co. and Airbus have also
signed a contract for the purchase of 20 A330-300 aircraft for
fleet replacement and expansion. A training and support centre
which represents an $80 million investment by Airbus is fully
operational in Beijing. Five Chinese companies are already involved
in producing parts for Airbus aircraft.
A protocol for the development of industrial
cooperation between China Aviation Industry Corporation (CATIC)
and Airbus has been agreed as well as a cooperation framework
agreement on an advanced medium utility helicopter programme between
CATIC and Eurocopter.
8 NOVEMBER 2004
AIRBUS BOOSTS IP WITH CHINA
Airbus has stepped up industrial participation
with China by agreeing to sub-contract projects worth $100 million
to China Aviation Industry Corporation I (AVIC I). The projects
will represent the first industrial participation agreement between
Airbus and China on the production of A380 components. Airbus
then announced plans to further increase its general procurement
from China, raising this to $120 million a year by 2010, double
the target for 2007.
Five Chinese companies are already involved
in making parts for Airbus aircraft, namely the Chengdu Aircraft
Corporation, Shenyang Aircraft Corporation, Xi'an Aircraft Company,
Hong Yuan Aviation Forging and Casting and Guizhou Aviation Industrial
Group.
Airbus will also allocate A330 and A340 forward
cargo door projects to Shenyang Aircraft Corporation, which is
affiliated with AVIC I.
Since 1985, the total value of projects subcontracted
by Airbus to Chinese manufacturers has exceeded $500 million.
Alstom technology transfer for China:
Alstom will provide sufficient technology transfer
to allow China to build 51 out of 60 locomotives from kits to
be supplied under a contract worth more than $l billion. Alstom
also won a contract worth some
380 million (US$471 million) to deliver another 12
locomotives and provide technology to build 168 others in China,
the company said.
22 NOVEMBER 2004
FRENCH AEROSPACE INDUSTRY STRENGTHENS POSITION
IN CHINA
To consolidate its position further in the Chinese
market, Snecma and the Ecole Centrale de Lyon engineering school
have signed a training agreement with two Chinese aeronautical
engineering schools: the Nanking University of Aeronautics and
Astronautics, and the Polytechnic University of the Northwest,
in Xi'An. This is in addition to an agreement signed two years
ago with the Beijing University of Aeronautics and Astronautics,
and the Jiao Tong universities of Xi'An, Chengdu and Shanghai.
The agreements appear to form part of a wider
industrial co-operation policy. Snecma has also signed a research
contract with Mrs Chen Haiqiu, Deputy Director of the Science
and Technology department at the Beijing University of Aeronautics
and Astronautics.
One out of every two Chinese jetliners is powered
by CFM56 engines and China's AVIC I plant manufactures CFM56 parts
for Snecma. One out of every three Chinese jetliners is fitted
with Messier-Dowty landing gear (a Snecma group company). Messier-Dowty
has opened a landing gear parts production facility in Suzhou.
Half of all helicopters in China are powered by Turbomeca engines
(another Snecma group company). AVIC II is a long-standing Turbomeca
partner.
The Chinese Ministry of Science and Technology
and the French Ministry of Research are organizing a joint forum
on innovation and research spin-offs. Snecma is taking advantage
of this event to strengthen and consolidate its collaboration
with China in research and training.
Italy/China:
Italy's Agusta and the Jiangxi Changhe Aviation
Industries Company, an AviChina company, have also signed a joint
venture agreement for the sale, production, marketing and local
support of the A109 Power helicopter.
27 DECEMBER 2004
EADS OFFERS CHINA A350 WORKSHARE FOR AIRBUS
A320 DEAL
China has agreed to purchase 23 Airbus A320
aircraft valued at about $1.2 billion, with Chinese companies
taking 5% of the work on the Airbus A350 programme.
Airbus will be offering Chinese industry a risk-sharing
participation in the design and the manufacture of the A350 programme,
said Gustav Humbert, the company's Chief Operating Officer and
Executive Vice President Programmes. The A350 will be based on
the A330, but will feature new wings and engines, and could compete
strongly with Boeing's 7E7 jets.
"The potential collaboration with China on the
A350 is immediate. It is a very timely stepping stone to the full
risk-sharing participation of at least 10% in a long-term future
programme of Airbus," he added. Airbus has also undertaken
to transfer to China the technology required for manufacturing
the complete wing of the A320 family aircraft, Humbert said.
The company intends to establish an engineering
centre in China. From 2008, more than 200 engineers will have
the opportunity to participate in Airbus developments. This will
enable China to become a full industrial partner in any future
Airbus aircraft developments, a press release said. The A350 programme
is subject to the approval from Airbus' shareholders EADS and
BAE Systems.
The Eurocopter division of EADS signed a framework
contract with AVIC II in October for the joint development and
production of a new multipurpose helicopter that will be available
on the world market in 2010. Another contract was signed in Paris
last June to set up a production line in Harbin for the EC 120
helicopter. A $30 million investment made by EADS in the aeronautical
manufacturer AviChina in October 2003, providing a 5% stake in
AviChina, is understood to have opened up the way for reinforced
cooperation with AVIC II in the helicopter field.
"In line with our long-term approach, we
are planning to strengthen our presence in China," said CEO
Rainer Hertrich. "We are seeking to expand our partnership
opportunities in the areas of research, development, sourcing,
manufacturing and aftersales-service."
EADS Hertich: No Arms Embargo Link To China A380
Order
Dow Jones Newswire, Dec 7—China has never
hinted at any link between the lifting of the EU's arms embargo
and the long-awaited signing of an order for the Airbus (ABI.YY)
A380 super jumbo jet, European Aeronautic Defense & Space
Co. NV (5730.FR) co-Chief Executive Officer Rainer Hertich said
Tuesday. Hertich said even if the embargo were to be lifted, more
needs to be done within the EU to harmonize export controls for
military-use products. EADS manufactures defense equipment in
several EU countries and the different export control regimes
continue to be a problem, he said. Even with the arms embargo
still in place, EADS aircraft unit Airbus continues to book new
orders from China's three major carriers. As its order book swells,
Airbus has also been increasing its partnerships with contractors
in China, including Chengdu Aircraft Corp., Xi'an Aircraft Co.,
Hong Yuan Aviation Forging & Casting and Guizhou Aviation
Industrial Group. Subcontracting by Airbus in China is expected
to rise to $60 million a year by 2007 and eventually $120 million
by 2010, from about $30 million a year in 2004. Hertich said eventually
it might even be possible for the company to set up a local Airbus
China unit to manufacture aircraft as it comes closer to meeting
its goal of securing 50% of the country's commercial jet market.
EADS to Target China Market If EU Arms Embargo
Lifted
EU Business, UK, Dec 7—Europe's largest
aerospace and defense company EADS said Tuesday it would likely
begin talks on potential military deals with Beijing if the European
Union lifts a 15-year-old arms embargo on China. "Sure, once
it happens, the embargo is lifted, we would get in touch with
them (the Ministry of Defence) to try to understand what is their
future demand," European Aeronautic Defense and Space Company
chief executive Rainer Hertrich told journalists.
However, it may all depend on how EU governments
view the equipment as acknowledged by EADS . . . Hertrich said
that even if the embargo was lifted, other restrictions would
still be in place on what could or could not be sold to China.
Besides the embargo, EADS and European nations, they have their
export control regimes and so definitely there will be further
limitations," he said.
January 2005
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