China Airborne (5 page)

“I looked at my watch, and even before eight minutes, the helicopter was coming,” Xu said, when he told me the story in Beijing. The rescue crew lifted the victim from the boat’s deck into the helicopter, and thence off to an emergency room.

“I heard later that the man’s sight had been saved,” Xu told me when reflecting on the role played by the rescue helicopter. “I realized that if he had been in China, absolutely there is no chance to save his eye. I said to myself, Someday I will bring this technology to China.” At the current stage of China’s growth it is common to hear that kind of “I will change the world / I will transform my country” declaration. Xu was certainly right about the unmet need in his homeland. A dramatic instance occurred after the Sichuan earthquake of 2008, when many thousands of Chinese people survived the initial landslides and building collapses, only to die of exposure or dehydration in the subsequent days. Chinese rescue forces had to trudge in by foot, since roads through the mountainous territory had been buried and the country had far too few helicopters with which to reach those who were still alive.

In the early 2000s, Xu came back to China, to expand his business and reenter the Chinese linguistic and cultural environment. He became a leader of the charmingly named Western Returned Scholars Association, composed of people who, like him, had graduated from American or other foreign universities and come back to China after successful business careers abroad. Xu had had $40 in cash in his pocket when he arrived at Kennedy Airport the first time, in 1983, and had been panicked at the discovery that the taxi to his student dormitory cost $30. Thus he had to find a part-time job immediately, which he did the very next day. By the time he returned to China two decades later, he had become rich by any country’s standards. Hearing stories like Xu’s, I often felt in China as if I were living through
a Horatio Alger novel, or a collection of them simultaneously. The rags-to-riches tales with their emphasis on early hardship, subsequent business success, and gratifying return to a prospering homeland, were so common that I had to remind myself to keep paying attention to them.

As he went on about his dream of what aviation would mean for China, Xu seemed tongue-tied for a moment. He turned to the translator and said, “I am forgetting my English! Let me speak in Chinese.” One of the Americans at the dinner, who was making his first trip to China and spoke no Chinese, said with unthinking Blimpish patronization, “Oh, your English is not that bad!” Xu was in fact fully fluent in English, albeit with an accent, having done business in America for decades. He couldn’t help himself: “Well, it
is
better than your Chinese.” He softened that, somewhat, with a smile, and then switched to Chinese and relied on the interpreter: “It is as if we were talking twenty years ago, and I told you this was going to be the biggest market for cars in the world. You would look around and see the bicycles and the oxcarts, and you would think I was crazy. I would have been evicted from America if I had made that kind of claim!” Of course, by 2010, Chinese companies produced more cars, and Chinese customers bought more—including luxury models—than their counterparts in the United States. At that point General Motors was surviving not simply because of government help in the United States but also because of its strong position in China, where Buick remains a prestigious and best-selling brand.
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“Or when those first very large Motorola ‘mobile’ phones came into China twenty years ago. And
The Wall Street Journal
said it would be ten years before China had regular desk phones and another ten before cell phones became popular.” Of course, China was the world’s largest mobile-phone market by the early 2000s.

“That is how it is going to be with flying. The next step will be the helicopter. Everything is about to take off.”

The Twelfth Five-Year Plan, the one that included aerospace as a strategic industry, wouldn’t officially begin until later in the year, but at the start of 2011 the steps toward China’s ambitious future in the skies kept coming. As Xu had said, they paralleled the leaps the country had previously made in electronics, automobiles, and many other fields, and the operative principle did seem to be “everything is about to take off,” all at once.

A week after that dinner, the Beijing police force would announce its plans to buy a new fleet of helicopters for traffic and safety patrols over the town. Chinese cities have plenty of street-level noise, to put it mildly, but as soon as you think to notice it, you’re struck by the lack of the overhead roar from airliners and helicopters that is the background soundscape in most of the world’s other big cities. Later that same month, the head of China’s central aviation agency—Li Jiaxiang, a former People’s Liberation Army Air Force general who had then become head of China’s national airline and who now ran CAAC, the Civil Aviation Administration of China—previewed some of the spending details that would accompany the next Five-Year Plan, including the 1.5 trillion RMB (at the time about $200 billion) for new airports, navigation systems, and airplanes. The story was run across the top of the front page of
China Daily
, the state-controlled English-language paper that is China’s face to the outside world. “Aviation Sector Has High Hopes for Next 5 Years” was the headline.
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In aerospace as in so many
areas, China was starting out far behind the United States and many other developed powers—but planned to catch up fast. The country’s commercial airline fleet numbered only about 2,600 airplanes as of 2010, roughly half as many as America’s for a population four times as large. The target in the next five years was 4,500 airplanes, a rate of purchase that would represent about half of the new aircraft sold anywhere in the world. Back in 2009, when airlines everywhere else in the world were canceling jet orders and stretching out delivery schedules as long as possible, a Boeing executive had pointed out that China was the only “dynamic aviation market” in the world and said that its “strong domestic air-travel growth” was the main indication “that the world aviation industry is beginning to recover.”
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Total airline passenger volume had increased only modestly in the United States and Europe throughout the whole first decade of the twenty-first century—because of the 9/11 attacks, world financial crises, increased security hassles, and the overall neuralgia of flying. But in China passenger traffic had never stopped growing, and it was predicted to keep doubling every five years. It is tricky to compare market capitalizations of Chinese firms, especially large state-owned enterprises that can draw on government support, with those of outside corporations that usually must rely on normal equity markets. Still, the scale of Chinese carriers is impressive. The flagship carrier, Air China, is in capitalization terms the largest airline in the world, by far. As of 2011 its market capitalization was about $19 billion, or much more than that of the carriers United-Continental, American, US Airways, jetBlue, SkyWest, Hawaiian, and Republic, which, combined, were worth only about $15 billion.
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The three largest Chinese carriers—Air China, followed by China Southern and China Eastern—are respectively numbers one, three, and
four in valuation among all airlines in the world. The three largest U.S. carriers are numbers nine, ten, and eleven, and the top three European lines are five, twelve, and thirteen.

Among passenger airports, Atlanta’s is still the world’s busiest, with about eighty-nine million passengers in 2010. But Beijing’s Capital Airport is already second and gaining, with about seventy-four million passengers and traffic growing by well over 10 percent a year. In 2000, the three largest cargo airports, by tonnage carried, were Memphis (as the hub for FedEx), Hong Kong (for southern China’s exports to the world), and Los Angeles (where many Asian imports arrive). In 2010, the three largest were Hong Kong, Memphis, and Shanghai. Traffic at both Hong Kong and Shanghai was up more than 20 percent from the preceding year, versus 6 percent for Memphis.
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And none of this even counted the ambitions to open China’s airspace for the kind of business-aviation boom that has been routine in the United States, Europe, Australia, and Latin America for decades. As of 2011, China still had relatively few airports compared with more developed countries—175 total, compared with nearly 1,000 in the United States capable of receiving commercial flights plus another 4,000 or so where propeller planes and small business jets could land. But the Chinese government was already at work on 150 new airports, mainly in parts of the country that had never previously had air service.

The Chinese ambitions extended to manufacturing too. Apart from the helicopters—and a planned jetliner that might someday take customers from Airbus and Boeing, and the regional jets—during the spring of 2011 a subsidiary of AVIC, China’s main state-run aviation corporation, bought Cirrus Aviation, the pioneering company in Duluth, Minnesota, that made the world’s most popular small propeller aircraft, including the one in which Peter Claeys and I had gone to Zhuhai.

Around the same time another AVIC subsidiary bought Teledyne Continental, the United States–based company that made the engines for Cirrus and a number of other small planes.

About ten days after that dinner with Mr. Xu, I was in Hong Kong, at the Asian Aerospace Expo, where organizations as large as Boeing and Airbus and as small as tour operators or three-pilot flight schools looked for customers. A Chinese man who had for some reason chosen the improbable English name Vicky—he and his business partner were known as Ricky and Vicky—had begun operations for an “FBO,” or fixed-base operator, the aviation world’s term for the kind of small-airport facility that would serve non-airline aviation.

“Now that they”—the government—“have got Cirrus, I think you will see very good support for general aviation in China,” Vicky said. “Today we have only a few airplanes in all of China. In the United States, there are more than two hundred twenty thousand small airplanes!
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I can say, the market here will be enormous.” Next to Vicky in the booth, I met a man named Chen, from the northeast zone of China still called Manchuria in the Western world and Dongbei, “East-North,” in China. “I had always had a dream to fly, but when I tried to the military I did not pass the body exam,” he told me, in English, referring to the military’s physical screening tests. He looked perfectly hale, and I assumed that he had run afoul of the People’s Liberation Army Air Force’s notoriously strict eyesight standards for pilots.

Mr. Chen was a child during the Cultural Revolution and ended up in the metal-parts business. Thanks to China’s infrastructure boom, he became very rich. His company had the contract to build metal structures at towers at the 2006 International
Horticultural Exhibition in Shenyang, the northeastern city known as Mukden in the colonial days. The soaring symbols of the towers reawakened his interest in flight. He bought a small glider, went to the gigantic international AirVenture gathering in Oshkosh, Wisconsin, and decided he would make aviation part of his business. By the time I met him, he had also decided to buy several “wind-tunnel machines”—huge turbines that supported paying guests on cushions of air and gave them the feeling of skydiving—that he was going to install at the former site of the Shanghai World Exposition, and other places. “The aviation market in China is going to become very big!” he told me, reinforcing what Vicky had said. “Everyone knows this, all around the world!”

On the same day I spoke with him, I interviewed a salesman for a private jet company, who said that he had sold three new jets to Chinese customers within the past twenty-four hours. Each of the planes cost around $20 million; one of the sales was in cash, delivered in suitcases. In some parts of the world, bulk cash payments might come only from drug dealers or arms traffickers. In this instance the purchaser was a regional industrialist and real estate magnate, and the cash was a sign of the fast growth and rough-and-ready nature of Chinese capitalism at the moment.

A few days after that, a company in Shanghai announced the debut of
Wings and Water
magazine, a Robb Report–style publication about yachts and private jets for China’s new wealthy class.
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As a gauge of the potential, an official from Dassault, the French jet firm, pointed out that the United States already had more than eleven thousand business jets, versus two hundred to three hundred in China (only thirty of which were registered—the rest flying illegally). An aviation blogger outside China calculated that China had only 22 private jets per
trillion dollars of gross domestic product (GDP), versus 535 for the United States and 138 for Europe.
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If it were to match the European level—on an income basis, not even adjusting for population—that meant its fleet could expand sixfold. To match the American level, a better comparison given its geography, it could expand by a factor of twenty-five. At the first-ever China Business and Private Jet Expo, held in Shanghai in 2010, the proudly nationalist paper
Global Times
—which chronicled the country’s rise with such features as “Chinese vs. Foreign Stars: Who Has the Most Beautiful Legs?”—said China’s leading role as an aircraft market, and eventually as a producer, would be another sign of its emergence as a modern power. “We are going to buy
two
business jets this time,” the story quoted Li Nonghe, secretary general of the World Chinese Business Advancement Association, as saying. It added, “He showed his feelings of pride as Chinese are becoming richer to the point of owning jets.”
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These plans were grand; some were grandiose. Some of them would succeed; some would become huge money losers and at best would be forgotten, with deluded investors or indifferent state agencies left to cover the eventual loss. Some would represent significant challenges to established businesses and whole industries in the rest of the world. Some would open opportunities for foreign participants. In these aspects and many others, the impending drive to make China a major player in the world’s aerospace business resembles many other aspects of the country’s rush to modernization since the beginning of its market reforms and opening to the world starting in 1979. The
more time I spent in China, the more I thought that this aspect of its industrial ambition, which has received far less attention than comparable pushes for clean-energy, info-tech, biotech, and other fields, was the next great arena and test case for Chinese modernization.