Dear Fellow Retired China Travelers,
The saddest nostalgia is for futures that didn’t happen. For example, Concorde desktop models with Iran Air livery, or my childhood book, You Will Go To The Moon. Last week’s certification of Comac’s C919 evokes exactly this feeling. It was created for a future that once seemed likely, but no longer is. The world has changed since the C919 was launched in 2009; the future has changed too.
I never liked the C919. It’s a me-too jet with no innovation. And there was my big concern: given the certainty of IP theft, Western suppliers would only transfer old technology, resulting in a miserable plane, like the ARJ21. But looking back, there were four very optimistic assumptions embedded in the C919, which represented hope for the future.
First, when the C919 began, China was on a path of private enterprise, growing trade and supply chain integration with the world, and very fast air travel growth. You could even hope, as a best-case scenario, that China’s prosperity and trade would lead to a more open society. Trade growth was making strategic competition less relevant, and conflict less likely. Until a few years ago, de-coupling was a word used for obnoxious celebrity divorces. The C919, in its mediocre way, symbolized these global relationships. The C919 was simply what prosperous countries with wannabe aviation industries did. It was imperfect, and yes, they were stealing Western tech, but it was all totally worth it.
China today is very different. Xi Jinping came to power three years after the C919 launch. His toxic autocracy blends blind nationalism with a clampdown on the best part of China’s economy – the tech sector – and an emphasis instead on loser state-owned enterprises. Foreign Direct Investment has collapsed. For many reasons, industrial sovereignty is in vogue, and when Western leaders say “Re-shoring,” “Near-shoring,” or “Friend-shoring,” it mostly comes down to re-jiggering supply chains to avoid China. Remember that vaunted “Chimerica” financial relationship? When the C919 was launched, China held around 14% of US Treasuries. Today, it holds about 4%.
Then there’s the recurring Covid lockdowns. They may vanish after October’s party congress makes Xi emperor-for life, but it’s not at all clear whether these lockdowns are a rehearsal for an autarkic and austere future, perhaps after total de-coupling, perhaps after a war over Taiwan. Either way, China air travel is now 60% off the 2019 peak, and the country’s air travel market slowdown began before the pandemic. That double-digit air travel growth story is gone. The country’s move away from a market economy doesn’t help. Rather like Boeing in the 2010s, China was a very strong growth story hijacked by the wrong people.
As an aside, vaccines prove that autarkic schemes like the C919 are dumb. The PRC closed the border to imported vaccines, and relied on indigenous ones, with lethal consequences. Imagine running aviation that way: closed borders (even for imported systems and technologies), regulators under political control, and the press silenced. What could possibly go horribly wrong?
Second, related to the first, was the assumption that dual-use technologies (aerospace, telecoms, chip manufacturing, etc.) would also be freely traded with China. Everything onboard the C919 that has any value – engines, avionics, APUs, whatever – is either imported from the West or built by a Sino-Western JV. When launched, it was assumed that the C919 would always have access to this tech. It’s more a Western jet than a Chinese one.
Today, aerospace leads the way in de-coupling. In December 2020, Trump’s Commerce Department issued a Military End User (MEU) export list, prohibiting tech exports to entities that “represent an unacceptable risk of use in or diversion to a ‘military end use’” in China and other countries. Comac isn’t on this list, but its parent and partners are. This list is opaque, leaving manufacturers uncertain about what they can export. Biden hasn’t changed this. The MEU list’s rules may be hard to grasp, but the possible consequences are clear: last year, Canada effectively killed China’s MA700 turboprop by withholding PW150 export approval. There’s no Chinese or Russian engine that can do the job.
Recreating this Western content in China, for the MA700 or the C919, even with ripped-off technology, would take tens of billions of dollars and at least a dozen years. The consequences of this are profound. If China closes the borders to Airbus and Boeing imports, the US and allied countries can simply kill the C919 by prohibiting system exports.
Third, the C919 assumed that China would adhere, or at least pay lip service to, global rules and regulations. The WTO for trade. The UN for conflict resolution. ICAO and other bodies for air transport. The C919, at one point, was to be certified with a high level of cooperation between the CAAC and the FAA. Ryanair’s Michael O’Leary cheerfully announced that he’d consider buying the C919, after Western certification.
Instead, China has gone rogue, in trade, human rights, regional bullying, whatever. If we’re lucky, the PRC won’t attack Taiwan. Xi may not be completely aligned with Putin, but that’s because Putin looks incompetent, not because Xi views brutal aggression as bad in any way. For many reasons, C919 certification won’t be reciprocated by any other national agencies anytime soon. And the C919 approval process is in stark contrast to the CAAC’s politicized, opaque, and slow-rolled 737MAX recertification.
Fourth, and most, when the C919 was launched everyone assumed that people would be freely and happily traveling to and from China. Again, yes there was IP theft, but people mostly went about their business: holding meetings, discussing requirements, selling and delivering kit, harmonizing regulations, and interacting, perhaps seeing that folks on the other side were a lot like them, and had a culture that was worth discovering. Those cross-cultural relationships are going away, in more industries than ours.
Once, the C919 symbolized China’s rise as an aviation power. I didn’t appreciate it at the time but implicit with that goal was a level of integration into the world economy, and the broader community of peaceful nations. Instead, the same C919 has become a way to measure and track a dystopian future – either the West kills this jet (as with the MA700), or it gets built in tiny numbers (as with the ARJ21), or China needs to replace it with a real Chinese alternative. Again, all we can feel is nostalgia for the C919 as it began life in 2009.
Yours, ‘Til The Future Is Again What It Used To Be,
Richard Aboulafia