If China succeeds in its ambitions to field commercial airliners, much more than the Boeing-Airbus duo will be disrupted.
Now it should be clear to even the most hardened cynic that Boeing’s moves in recent years to pressure its unions and suppliers to cut costs, as well as to ask for fresh 777X subsidies from Washington state, were about more than mere corporate greed.
For years, Boeing and Airbus have seen China coming. And the People’s Republic made a big step this week unveiling a prototype of its first domestically produced airliner.
The state-owned Commercial Aircraft Corp. of China, or Comac, rolled out the single-aisle C919, a jetliner that would compete directly with the 737 — I’m talking to you, Renton — as well as Airbus’ A320.
If the plane succeeds, and Beijing has ensured that it already has 517 orders, almost all from China, it would mark a tectonic shift in the world duopoly of Boeing and Airbus.
Airplanes have been the decisive factor in making China the No. 1 destination for Washington merchandise exports, and Washington the top state exporting to China.China is Boeing’s largest customer. The nyanticipates demand for 6,330 airplanes, valued at nearly $1 trillion, over the next 20 years. During President Xi Jinping’s state visit, Boeing won orders for 300 jets, including 190 737s, with a face value of $38 billion (discounts often apply). Boeing also has plans to open a 737 delivery center in China.
To be sure, Boeing has decades of experience in building airplanes and has worked hard to build ties with Chinese customers. Successfully fielding a commercial airliner is one of the most difficult industrial tasks. There’s plenty of business to go around, in theory.
Competition is good for everyone. The United States until fairly recently has three major commercial airplane makers.
But, of course, China plays by its “heads we win, tails you mostly lose” economic strategy. As part of a push to create robust, advanced domestic industries it has insisted that Western companies share technology. Comac will have the backing of the Chinese government in a way that would make the U.S. Export-Import Bank look like pocket change.
So Lenin was not quite right when he reputedly said when it comes time to hang all the capitalists, they will be bidding on the rope contract. The Communist-Capitalist Party will win the deal instead. The better axiom is from Napoleon: Let China sleep, for when the Dragon awakes, she will shake the world.