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China To Build Its Own Large Jetliner 332

Posted by timothy
from the rising-tide-lifting-boats dept.
Hugh Pickens writes "China's domestic airlines will need to buy an estimated 4,330 new aircraft valued at $480 billion over the next two decades to meet demand in commercial aviation. Now the LA Times reports that the Commercial Aircraft Corp. of China expects to begin producing its 156-seat C919 by 2016, competing with the Boeing 737 and Airbus A320. China has staked billions of dollars and national pride on the effort but what may surprise some Americans worried about slipping US competitiveness is that some well-known US companies are aiding China, putting US and European suppliers in a tough spot: Be willing to hand over advanced technology to Chinese firms that could one day be rivals or miss out on what's likely to be the biggest aviation bonanza of the next half a century. 'If they launch a commercial aviation industry, you've got to be part of it,' says Roger Seager, GE Aviation's vice president and general manager for China, whose company has garnered contracts worth about $6 billion for the C919. 'You can't take a pass and come back in 10 years.'"
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China To Build Its Own Large Jetliner

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  • What's the adage? (Score:5, Insightful)

    by QuantumG (50515) * <qg@biodome.org> on Monday November 15, 2010 @05:57AM (#34229046) Homepage Journal

    Oh yeah, "A capitalist will sell you the rope you will hang him with if he can make profit on it" Lenin

    • by 91degrees (207121) on Monday November 15, 2010 @06:03AM (#34229060) Journal
      It's basic game theory. If you can make a profit out of something that will kill you, you might as well. At least your last few days wil be that little more comfortable. It's no like China can't set up its own avionics equipment companies. It's just easier to partner with US and european companies. COMAC could just design it to use 737 parts, which can be purchased off the shelf, and do a piecemeal replacement as they get their own avionics industry in shape.
      • by chrb (1083577) on Monday November 15, 2010 @06:53AM (#34229234)

        It's basic game theory. If you can make a profit out of something that will kill you, you might as well.

        The game theory is indeed simple - it's better to have 20% of a billion person market than 0%. The commercial airplane industry is largely dominated by Boeing and Airbus - two Western companies that have both received substantial state support [europa.eu] The market for jet engines is dominated by Rolls-Royce. Given how interested Western nations are in having their own commercial aircraft manufacturing capability, it is no surprise that China also wants one.

        This will not kill Boeing or Airbus. Unlike cheap crap that people buy off ebay, the commercial airplane market in the West is quite image sensitive and financially and managerially cautious. They are not going to switch fleets to cheaper Chinese aircraft just to save a few dollars. Consider that Rolls-Royce jet engines are the standard in commercial aviation, and they certainly aren't the cheapest, but everyone still pays up - because any airline that switched in order to save a few dollars would be crucified if the new aircraft crashed.

        • Re:What's the adage? (Score:4, Informative)

          by xonar (1069832) <xonar AT smagno DOT com> on Monday November 15, 2010 @07:44AM (#34229428) Homepage
          From Rolls-Royce's website "Rolls-Royce wins $1.2 billion order from China Eastern Airlines and agrees environmental partnership"

          http://www.rolls-royce.com/civil/news/2010/101109_china_easter_order.jsp [rolls-royce.com]
        • Re:What's the adage? (Score:5, Interesting)

          by umghhh (965931) on Monday November 15, 2010 @07:54AM (#34229470)
          Two things:
          • the engine market is not dominated by RR this much. General Electric is bigger and Pratt & Whitney is also huge.
          • All this enthusiasm in air transport does not seem to take into account the problems with fossil fuels and their availability in the future. I wonder how the air transportation will look like in 50 years. I am sure alternatives will be found but they will not be cheap. This does not mean one should not invest but I think a second thought should be spent on sustainability (both in terms of economics as well as environment) in this particular industry
          • Re: (Score:3, Insightful)

            by chrb (1083577)

            the engine market is not dominated by RR this much. General Electric is bigger and Pratt & Whitney is also huge.

            Fair enough, in engines GE > RR > P&W. But my point still stands - all have good reputations, and the cautious airline industry in the West is unlikely to switch away any time soon.

            This does not mean one should not invest but I think a second thought should be spent on sustainability (both in terms of economics as well as environment) in this particular industry

            I totally agree. Humans are generally reactive rather than proactive. It is easy to look at current growth rates of the airline industry and assume that they will continue for the next two decades, but it's just a guess - Peak Oil could easily derail it. Unfortunately, the governments of the world seem to be keeping rel

        • by sjbe (173966) on Monday November 15, 2010 @08:46AM (#34229662)

          The market for jet engines is dominated by Rolls-Royce.

          I think General Electric [wikipedia.org] and Pratt & Whitney [wikipedia.org] will be very surprised to hear that.

          This will not kill Boeing or Airbus. Unlike cheap crap that people buy off ebay, the commercial airplane market in the West is quite image sensitive and financially and managerially cautious. They are not going to switch fleets to cheaper Chinese aircraft just to save a few dollars.

          The largest exporter in the US is Boeing. Most of their sales are outside the US. The commercial airline market is a global market, not regional.

          Is a Chinese widebody jet an immediate threat to Boeing and Airbus? No - it will take quite some time to develop. Could it seriously hurt Boeing and Airbus in a huge future market? Absolutely. Does it introduce another potential serious competitor? You better believe it. Would airlines switch planes if there was an economic case for doing so? Hell yes - if there is enough financial advantage in doing so they will buy from anyone. Airlines are not terribly profitable businesses so any economic advantage they can realize will be taken advantage of.

          Japanese products used to be regarded as cheap crap, even within my lifetime. They got better. Lots better. Chinese firms already are very capable at manufacturing and there is little reason to doubt that they can produce a competitive product if they decide to do so, especially with state support. Hell China has a very active space program now. Canada's Bombardier and Brazil's Embraer already have excellent products in the regional jet market. No reason China can't join the party too.

          • Re: (Score:3, Informative)

            by sjbe (173966)

            Most of their sales are outside the US.

            Self correction. About half come from exports. Boeing by itself is about 1.5% of US exports.

      • by benjamindees (441808) on Monday November 15, 2010 @06:59AM (#34229254) Homepage

        That would be true, if profit were measured in some fixed terms.

        Unfortunately, here in reality, the economics profession is a complete fucking failure of a joke. Banks are run by dipshit morons propped up by criminal politicians. Corporate accounting is a total fraud. Ridiculous models conflate assets and technology and labor along with fiat currencies that have no real measurable value. The entire bullshit field is based on a fantasyland premise of perpetual growth in "utility" along with magical non-zero-sum mathematics at odds with even basic physics.

        And this is what "free trade" gives us: US companies offshoring jobs and real assets, chasing little pieces of paper printed up by the central banks, earning hypothetical economic "profit" while actually making us all poorer in the process.

        With regard to China, the result is exactly what one would expect when trading with a country with few natural resources and a billion consumers: American labor has lost all value. Technology that America has invested heavily in, is either stolen outright or practically given away to rising competitors. Real capital is exported en masse in exchange for worthless consumerist crap. And it won't stop until either we've all been dragged down to the level of the average Chinese peasant or we wake the fuck up and start hanging traitor politicians and bankers in the streets before they give our entire fucking country away and then conscript us into some new bullshit war to try to go get it back.

        • Re:What's the adage? (Score:5, Interesting)

          by JustOK (667959) on Monday November 15, 2010 @07:09AM (#34229284) Journal

          China has few natural resources?

          • by gusmao (712388) on Monday November 15, 2010 @08:20AM (#34229564)

            China has few natural resources?

            Yes, China is the one of world's biggest importers of iron ore, copper and crude oil, not to mention rubber and other commodities. So, althought the sentence "few natural resources" is too general (china is one of the biggest exporters of rare minerals, for instance), it certainly is applicable to a lot of core commodities for manufacturing

          • Re: (Score:3, Informative)

            by arivanov (12034)

            It has little or no oil or iron for that matter.

            The oil situation may change somewhat if it resolves its disputes around contentious areas with probable oil fields in the yellow sea. However even with these deemed to belong to then, online and exploited to the full it will still need to import.

            As far as most metals, etc it will always have to import. So the biggest danger to China's economic boom is actually not the increase of their own living standard and costs - it is the rising competition from other co

            • Re: (Score:3, Interesting)

              by cyfer2000 (548592)

              China has large quantity of low quality iron ore, but making iron and steel from rich ore imported from Australia and Brazil is cheaper than making from their own.

              BTW, in 2005, China produced 420,000,000 ton of iron ore, and US produced 54,329,242 ton of iron ore the same year. What information can you deduce from these numbers?

        • Re: (Score:3, Informative)

          by Kjella (173770)

          Unfortunately, here in reality, the economics profession is a complete fucking failure of a joke. Banks are run by dipshit morons propped up by criminal politicians. Corporate accounting is a total fraud. Ridiculous models conflate assets and technology and labor along with fiat currencies that have no real measurable value. The entire bullshit field is based on a fantasyland premise of perpetual growth in "utility" along with magical non-zero-sum mathematics at odds with even basic physics.

          Oh, the anger. What exactly is your problem with today's money? It's not gold backed but you can very well buy gold for dollars. Or real estate or whatever else "lasting" value you seem to think it lacks. As for the subprime fiasco it takes two to make a subprime loan, but blame it all on the lenders.

          "Utility" is a personal measure of something's worth, generally it's used in pricing theory. If utility > price you buy, otherwise you don't. It's not easily measured nor aggregated, so do tell where you've

        • by sjbe (173966) on Monday November 15, 2010 @09:11AM (#34229808)

          I'm pretty sure you are a troll but eh, whatever...

          Unfortunately, here in reality, the economics profession is a complete fucking failure of a joke.

          It is called the dismal science for a reason. However that is mostly because it is REALLY hard to accurately model human behavior. People are unpredictable and do unpredictable things, both individually and in groups. If you can do better a Nobel prize awaits you.

          Banks are run by dipshit morons propped up by criminal politicians.

          Morons? No they aren't stupid. Greedy, selfish or arrogant I might go with but the guys who run banks are very very bright. I've met more than a few myself. Stupid is not a word that would come into the conversation.

          Corporate accounting is a total fraud.

          How so? I am a certified accountant who does corporate accounting for my day job so I'm more than passingly familiar with this capabilities and limitations of corporate accounting. It's certainly possible to have fraudulent corporate accounting (Enron, etc) but that hardly is evidence that corporate accounting as a whole is a "total fraud".

          Ridiculous models conflate assets and technology and labor along with fiat currencies that have no real measurable value.

          Do you have even the foggiest idea what the word asset [wikipedia.org] means? Technology, labor and currency are BY DEFINITION assets. Anything tangible or intangible that can be owned or controlled to produce an economic benefit is an asset. Fiat currency's have measurable value and that value is measured every day. So long as people believe something has value, it does. Gold only has value because people believe it does. Same for any other resource.

          The entire bullshit field is based on a fantasyland premise of perpetual growth in "utility" along with magical non-zero-sum mathematics at odds with even basic physics.

          Glad you could distill the entire life's work of all those Nobel laureates. I'm sure they'll be happy you cleared up that they were wasting their time on a fruitless endeavor. You will of course be providing your own ever so insightful solution to all the worlds economic problems? ... No? Oh, I get it. You're on a populist rant and don't have time to be slowed down by actual logic, facts or reason.

          With regard to China, the result is exactly what one would expect when trading with a country with few natural resources and a billion consumers

          "Few natural resources"? Are we talking about the same country? China has natural resources that rival the US available to it. They are rich in some and lack others, just like any other country. Their needs are immense and often outstrip their domestic production as one might expect with a country containing 1/6 of the world's population but China is hardly resource poor.

          American labor has lost all value.

          Really? Then how does the US still have the largest economy of any single country in the world?

      • by gr8_phk (621180)
        Yeah, but it will take them at least 10-15 years to come up to speed. If the demand for the aircraft is there in 5 years they would have to buy US or EU planes. So GE is getting a few billion dollars and China is getting the ability to design and build it own fleet worth half a trillion dollars? Sounds dumb as fuck to me.
      • Re:What's the adage? (Score:5, Interesting)

        by Luckyo (1726890) on Monday November 15, 2010 @08:48AM (#34229674)

        Except that it doesn't work that way for high tech. China now is an excellent example of this: They really, REALLY tried to make proper military making machine for several decades. Investments were close to trillion levels.

        Results? To cover up the failures, they ended up essentially buying russian tech, modding it a bit, and showing it off as your own. The devepment costs needed to make a functional jetliner without the necessary know-how of the entire chain of suppliers is next to impossible, no matter how deep your pockets are. Look at russians themselves - after we raided their supply chain in 90s, essentially buying out and killing off many of their strategic know-how companies, they can't even make a current gen jumbo jet. This from country and bureaus that are known to produce civilian craft that has operated safely and consistently for decades in conditions boeing and airbus have problems making their military craft operate (TU-154 being the main supply workhorse for essentially entire Siberia, taking off and landing in what essentially amounted to nothing but a cleared out field with almost no accidents).

        At they at least have a history and know how how to build a new jetliner. And they still can't. For China to do this without West helping is in a realm of impossiblity, unless we're talking 1st gen jetliners, which can't compete with any Airbus or Boeing variants on anything.

        In this case, Lenin's quote is dead on. We are literally selling them the rope that they will hang us with. We're selling the supply chain and know how that took us DECADES to get, and would take them DECADES to acquire on their own. Rest is simply hardcore capitalistic bullshit about how we "have to participate now". Which is bullshit because if we don't participate now, they may have something among the lines of boeing 707, or more likely tu-104. Which is commercially pretty much dead on arrival considering the competition available - even russians, in spite of their problems could sell Chinese much better aircraft cheaper. Boeing and Airbus could even better then that.

        Essentially this one of the biggest reasons why Marx predicted the fall of too capitalistic system - it is utterly unable to properly regulate itself not to damage itself, and at the same time it tends to try to destroy outside attempts to regulate it - which is what we're seeing with this now. Big companies simply buying out politicians to get permits to essentially sell decades worth of know-how for pennies compared to what it would cost to develop it in the first place.

        • Re:What's the adage? (Score:4, Interesting)

          by BeanThere (28381) on Monday November 15, 2010 @10:16AM (#34230336)

          Essentially this one of the biggest reasons why Marx predicted the fall of too capitalistic system - it is utterly unable to properly regulate itself not to damage itself

          Um, except that the rise of a third major airliner manufacturer in the world isn't "damage".

          Three major economies, each with a major manufacturer of airplanes, in a massive global economy with more people flying than ever before, with competitive airlines (who will be able to buy better cheaper planes, thanks to more competition) offering ever cheaper flight and ever higher economies of scale. Yeah, sounds terrible. What a disaster.

          If the two Western airliners remain uncompetitive, then the worst case scenario is we still end up with a world full of airplanes, they'll just be manufactured by someone else instead. From a global perspective, that is not "damage" in any rational sense of the word. If you lose your lunch because you were unable to remain competitive, sure, then it sucks to be you, but 'the system' will not have 'failed' in any rational sense. And if you can't be competitive, you have to ask yourself why that is the case, and up your game.

          The overall market is growing in size very fast. A smaller percentage of a much larger market is not a 'failure' of the system.

          Having watched Airbus's struggles, launching such a manufacturing capability is not easy. China will encounter struggles along the way, so I wouldn't be too worried that all of a sudden Boeing and Airbus are going to disappear.

          • by Luckyo (1726890) on Monday November 15, 2010 @11:02AM (#34230762)

            You're ignoring the point for the sake deluding yourself that once the cheaper actor with no R&D outcompetes on price point, they will somehow magically conjure the R&D and become that which they crushed.

            We're seeing even now as many industries in the West are running to Asia, plant themselves there, and then note that their R&D hits the ground because it wasn't just a few key people that drove the innovation, but the entire support system and its own R&D.

            This is damage because the system competing against capitalism is controlled by a small centralized community. It's capitalistic for as long as this community allows - and not a millimeter more.
            Unless of course you count a "hostile, pretentiously capitalist until opponent is defeated" system as something of an ally. In which case it's just plain self-delusion at work.
            You may also look up "dumping", as well as "protectionism" as terms, as well as study how West in general held China down for over a century.

            This isn't anything new and original. US largely fought big European powers pre-WW1 to a standstill economically by essentially doing the same thing China is doing to West now. Buy tech, pirate tech, copy tech, compete making the same products but with no need to recoup massive research investments, outcompete on price point and win. This has already been done in many goods, such as electronics, and automotive industry is waking up to similar problem now.

            The end result is that the system winning is currently the one strongly regulating its own form of capitalism, while the system losing ground so fast, it can't even understand what's going on is our largely unregulated one. And one of the main reasons why they caught up so fast, is because we did exactly what I described in the previous post. We sold things that took us decades to develop for a quick buck.

            To quote Lenin again: A capitalist will sell you the rope you will hang him with if he can make profit on it. Chinese are offering companies a quick profit in exchange for information they can strangulate them with later on.

    • Oh yeah, "A capitalist will sell you the rope you will hang him with if he can make profit on it" Lenin

      Well, obviously, it's better than to be hanged on a rope sold by your competitor, not to make any profit at all, AND to see your competitor making profit!

      • Re: (Score:3, Funny)

        by TheRaven64 (641858)
        Unless your competitor's rope is so shoddy that it will snap when they try to hang you.
        • by peragrin (659227)

          no but the walmart rope is so shoddy that it will snap.

        • Re: (Score:3, Insightful)

          by paiute (550198)

          Unless your competitor's rope is so shoddy that it will snap when they try to hang you.

          How strong is cadmium-impregnated melamine rope?

    • Re:What's the adage? (Score:5, Informative)

      by advocate_one (662832) on Monday November 15, 2010 @06:45AM (#34229206)

      The firm my mother worked for put itself out of action by selling large hydraulic presses to the Russians to use in factories that were to produce large hydraulic presses...

      always knew there would be comebacks for letting the Chinese do your manufacturing for you as they would learn your technology and use it against you

      • Re: (Score:3, Interesting)

        by QuantumG (50515) *

        Did ya see this?

        http://www.youtube.com/watch?v=OTSQozWP-rM [youtube.com]

        • Re:What's the adage? (Score:5, Interesting)

          by dokebi (624663) on Monday November 15, 2010 @01:44PM (#34232642)

          What's ironic about that video is that China has actually done more of the exact things that is supposed to bring down the US:

          * Stimulus/spending out of recession: China has spent more of their GDP on stimulus spending that the US, and as a result has felt less impact from it. In fact, there is a linear correlation between amount a of GDP a country spent on stimulus and the length of the recession: the more they spent, the shorter the 2009 recession. Most economists acknowledge that if US had spent more, our recession would have been shorter.

          * Government take over of health care: Seriously? China has government (actually, Communist) health care. Neither they nor Korea, Japan, Taiwan are about to privatize their national health care system to stay or become competitive with US.

          * Government take over of private business: Chinese government owns and subsidizes many key corporations so that the corporation benefit the nation as a whole and not the CEOs and the shareholders.

          If one follows the logic of the ad, it would seem that the Chinese state controlled capitalism is much more effective than our form of capitalism, and if our biggest competitor is China, then we should counter with our own similarly designed policies.

          But no, this ad was carefully created to instill a feeling of fear and uncertainty, juxtaposition it with fiscal conservative ideas with almost no basis on fact. It is perfect propaganda.

          In fact, I believe blaming foreigners for self created domestic problems was the first step in the decline of Greece, Rome, UK....

      • Re:What's the adage? (Score:5, Informative)

        by TheRaven64 (641858) on Monday November 15, 2010 @07:09AM (#34229286) Journal

        I went to a talk back in 1996 by a Professor of Sinology at Cambridge, who was discussing the fact that it was Chinese policy to invite western corporations in with large incentives, then learn their business methods and create government-funded clone companies. The case study that he provided was Cocoa Cola, which was already quite an old example there. He wasn't talking about his latest research, just about a current trend.

        Given that this has been pretty widely known by anyone who bothers to look for about 20 years, I am amazed that any company would be stupid enough to move manufacturing to China. I'd expect a shareholder lawsuit for any that tried. Unfortunately, Wall Street has been selecting in favour of CxOs who avoid long-term planning for quite a bit longer than China has been an economic threat.

        • by Rogerborg (306625) on Monday November 15, 2010 @07:18AM (#34229334) Homepage

          If you don't sell them the tools to put you out of business, someone else will. Bonuses are all about the next quarter, not the next decade.

        • by umghhh (965931)
          It is not as much of an economic threat as it seems or at least not in the way you seem to realize. China is a huge country and dominated trade, inventions and economy in the world for significant amount of time. Only in relatively recent history had the west a chance to be up front. Now this is changing again and not really due to better Chinese economy or intelligence (which btw is what Chinese seem to think) but due to the fact that the country is so darned big and for once has independent and kinda uni
        • by Tom (822) on Monday November 15, 2010 @09:06AM (#34229760) Homepage Journal

          I am amazed that any company would be stupid enough to move manufacturing to China.

          That one is simple: American companies rarely think beyond the next year, and CEOs often not beyond the next quarter, because it is always the next quarter (or two) that seem to matter. A CEO who willingly lets the next few quarters suck in order to have the company in better condition three, four years down the road would be sacked long before the ROI happened. Then his successor can bring in the harvest, while cutting costs/jobs, be lauded as a genius, take a big bonus and leave before it all falls apart.

    • And an isolationist/nationalist will have to buy the rope to hang himself from the Chinese, due to the death of the domestic rope industry?
    • by mjwx (966435)
      Not even the Brazilian Embraers,

      It's the 717 clone [wikipedia.org] coming out of China that does, as well as the notion that HAL (Hindustan Aeronautics LTD, India) might get the same idea.

      Now quality in passenger aircraft is a major concern for me and any other frequent traveller. Airbus and Boeing have proven track records and are able to get to the bottom of problems in short order. I don't have that kind of confidence in China, especially as face comes into play. It may become, to the leader du jour that maintaini
  • Gold for salt. (Score:4, Insightful)

    by johncadengo (940343) on Monday November 15, 2010 @06:12AM (#34229086) Homepage

    I remember learning in school that West Africans would trade gold for salt, pound for pound, with people from Northern Africa and abroad because they didn't know how to make their own salt and they needed it to survive. It always made me wonder why they didn't just pay gold, even if it was an incredible amount, for the knowledge to secure their own salt. Producing salt wasn't all that difficult, if I remember correctly, the salt traders would just evaporate seawater in little holes in the ground and scrap up the leftovers.

    • by jonwil (467024)

      If you can make money selling salt to someone indefinatly, why would you teach them how to make your own salt (regardless of how much they are offering for it)?

      Its the same with the drug companies who prefer treatments (with big ongoing costs) to cures (with a one-off cost and nothing further)

      And its why you will never be able to get a license for an MPEG encoder (e.g. H.264 or MP3) that allows you to redistribute it for free (because you cant pay per-unit royalties on a download from a web page)

      • If you can make money selling salt to someone indefinatly, why would you teach them how to make your own salt (regardless of how much they are offering for it)?

        Game theory - it's a fairly simple variant of the prisoners' dilemma. If no one sells the secret, then all of the salt sellers can keep making a large profit. If one sells the secret, then the others lose all of their ability to make a profit. If you're the first person to sell, then you can make enough money that you and your descendants never need to work again. That's why this kind of trade secret had to be enforced with guilds and the like - basic self interest would prevent it from remaining secret

      • Its the same with the drug companies who prefer treatments (with big ongoing costs) to cures (with a one-off cost and nothing further)

        Would this myth fucking die already. Do you have ANY evidence that drug companies are actually hiding cures so they can continue giving "treatments"? Name me one disease that you have credible evidence that a cure can be found but the drug company killed it because it would hurt profits. And before you say "HIV", you might want to do some basic research first. There ha
    • Re: (Score:3, Informative)

      by chrb (1083577)

      It always made me wonder why they didn't just pay gold, even if it was an incredible amount, for the knowledge to secure their own salt.

      You're talking about the Trans-Saharan gold and salt trade [wikipedia.org]. The salt the Mediterranean traders brought came from salt mines in North Africa, not from the sea. I guess that the amount produced by evaporating salt water was tiny compared to mining, and thus commercially unviable.

      • Re:Gold for salt. (Score:4, Interesting)

        by mangu (126918) on Monday November 15, 2010 @09:25AM (#34229912)

        I guess that the amount produced by evaporating salt water was tiny compared to mining, and thus commercially inviable.

        This might be true, but I find it hard to believe. I grew up in Brazil and some of my earliest memories are seeing windmills like these [flickr.com] pumping seawater into evaporation ponds in the Rio de Janeiro state. [google.com] The amount produced was by no means "tiny" [extremonordeste.com].

        Today, the biggest economic competitor to this business is tourism, seafront real estate is becoming too expensive for evaporation ponds, but in the poorer regions in the Brazilian northeast [google.com] this is still a major resource.

         

  • Chinese Control (Score:5, Insightful)

    by bkmoore (1910118) on Monday November 15, 2010 @06:27AM (#34229140)
    I once read how German and Japanese companies were required to partner with Chinese companies in order to bid on high-speed rail contracts. Once the Chinese "partners" had the designs, they severed their partnerships and are now building all of their rail systems in house. So it was basically a scam to gain access to technology, and the promises of long-term contracts never materialized. I suspect something similar will happen this time around with aerospace. I doubt that the Aerospace companies are any more savvy on protecting their technology than the rail companies.
    • Re:Chinese Control (Score:5, Insightful)

      by DNS-and-BIND (461968) on Monday November 15, 2010 @06:48AM (#34229216) Homepage

      Yup, they stole...er, technology transferred the maglev tech that was used in Shanghai. A couple of years later, there was another identical maglev built and Chinese people cheered their nation for producing such advanced tech by themselves with no help. Now, they have bullet trains that are copies of the Japanese shinkansen. The first time I saw one pull into the station, I immediately thought, "Wow, a Japanese train! I wonder if they have those nifty box lunches!" (they didn't) But in Chinese language media, the trains are 100% Chinese and anyone who says otherwise is laughed out of the conversation. There are legal agreements in place that give the government a fig leaf of legality to say this. I saw a very carefully worded statement that vehemently denied stealing any technology and everything was hunky-dory.

      Same thing will happen with these airliners. Our companies will happily sell the rope to hang themselves. Anyone who protests will be labeled a racist/nationalist/xenophobe and excluded from the conversation.

    • by upside (574799)

      I remember the same, but IIRC the companies involved were fatalistic about it - they knew the score but again "could not afford to miss out". The problem is, the same technology will later appear in your own market in much cheaper Chinese products.

      It happens in other sectors as well.

      Worthwhile reading for tech companies planning to "partner" with Chinese businesses:

      http://www.time.com/time/magazine/article/0,9171,1955426,00.html [time.com]

      • Yeah, I always laugh when China decries protectionism, nothing like the most protectionist country on the planet telling other countries that protectionism is bad. China is by far the most hypocritical country on the planet, and being more hypocritical than the US is saying something.
    • Re: (Score:3, Interesting)

      by jandersen (462034)

      So it was basically a scam to gain access to technology, and the promises of long-term contracts never materialized.

      Business is business, even when it turns out that America doesn't have the upper hand. Being Danish, I have grown up on this sort of complaints; but against American companies.

      You know, for an American, you whine an awful lot; don't you believe in freedom? The free movement of knowledge can not be limited to only "the good guys", whatever that means - freedom is freedom, and sometimes it hurts. The Chinese have learnt well; and the great teacher was none other than the good ol' US of A.

  • by erroneus (253617) on Monday November 15, 2010 @06:41AM (#34229184) Homepage

    You know, over the past 6+ years I have brought my position out on multiple occasions only to have my position labelled "protectionist" and discarded. But we have a problem in the U.S. We are exporting money that doesn't return. Some call it trade deficit. Some call it exporting jobs. Others call it outsourcing. Whatever you call it, big business is sending out a lot of money that never returns to the U.S. What's more, in order to do that, the foreign workers have to be educated in our technologies in order to replicate what we have done.

    So we lost manufacturing and technology. All we have remaining is "intellectual property" which is really a thing that is not universally agreed upon. The things that made the US great aren't here any longer and while many of us were complaining about it leaving, government paid off by big business persisted in letting it happen.

    Now were are we?

    Maybe it is time for protectionism. Maybe it's too late for it to do any good. Government needs to think about the people, not the businesses. Business is demonstrably abusive of people when allowed -- it's why we have [outdated] labor laws at all. They are unashamed of it. It's past time our government did their job instead of the will of the highest bidders.

    • by gl4ss (559668)

      yes so the obvious answer is to lose freedom too.
      import fees? well, then the best business left would be to export technology solutions.
      and really the technology is actually pretty widespread, the american companies are lucky that the chinese are dim enough to need americans to put together parts and materials already produced in china - now the american companies get to bleed profits out of it, whilst doing nothing.

      isn't it funny enough that chinese sell their countrys resources in exchange for bits on a c

      • Re: (Score:3, Insightful)

        by erroneus (253617)

        WE the people don't need to lose freedom. Those "nearly human entities with nearly full human rights" need to lose freedom, however. They are merely legal constructs who are on the edge of having "free speech rights?!" It is getting beyond ridiculous. We need to protect ourselves from big business. We know what happens when we let them do what they want. We presently have laws in place and entire governing agencies in place and in operation to prevent the bad things that business will do if allowed.

        • Re: (Score:3, Interesting)

          by khallow (566160)

          WE the people don't need to lose freedom. Those "nearly human entities with nearly full human rights" need to lose freedom, however. They are merely legal constructs who are on the edge of having "free speech rights?!" It is getting beyond ridiculous. We need to protect ourselves from big business. We know what happens when we let them do what they want. We presently have laws in place and entire governing agencies in place and in operation to prevent the bad things that business will do if allowed. To name a few, the FDA, the FCC, the FAA, the EPA, the Department of Labor and more all exist because of what business would do if they were not regulated.

          "We know what happens"? Apparently not. What happens when you take away the rights of business owners is that they, the jobs, and the standard of living move elsewhere. While there are legitimate reasons for regulation, it remains that you can't force me to start a business (especially one without access to capital). You can't force me to hire people. All these TLAs have simply made the conditions ripe for the problems you happen to notice. Big, powerful companies can navigate the absurd forest of regulatio

          • Re: (Score:3, Insightful)

            by erroneus (253617)

            That has NEVER happened and no business will leave the U.S. entirely for that reason. That is complete nonsense. That argument is used every time there is discussion of increasing the minimum wage. Instead of talking about what "might happen" let's talk about what has already happened and the remedies that worked.

            Let's talk about how regulation of business practices did not put companies out of business and did create economic stability for more than 50 years since the great depression. Then we can talk

    • by digitig (1056110) on Monday November 15, 2010 @07:21AM (#34229350)

      You know, over the past 6+ years I have brought my position out on multiple occasions only to have my position labelled "protectionist" and discarded. But we have a problem in the U.S. We are exporting money that doesn't return. Some call it trade deficit. Some call it exporting jobs. Others call it outsourcing. Whatever you call it, big business is sending out a lot of money that never returns to the U.S. What's more, in order to do that, the foreign workers have to be educated in our technologies in order to replicate what we have done.

      So we lost manufacturing and technology. All we have remaining is "intellectual property" which is really a thing that is not universally agreed upon. The things that made the US great aren't here any longer and while many of us were complaining about it leaving, government paid off by big business persisted in letting it happen.

      The USA did it to the UK, now China is doing it to both of us. What comes around goes around.

      • by erroneus (253617)

        Exactly, the USA did it to the UK. And we somehow think it will work when we, in the USA do it? Hell no it won't work and it will bring about our ruin. Some will say it has already gone to far to be stopped.

  • the thing looks like an airbus ...
    they wouldn't be producing from that factory they wrestled from us as collateral to buying some did they ?

  • China's turboprops in the modern era are all Russian designs. The ARJ21 is a ripoff of the MD90 http://en.wikipedia.org/wiki/Comac_ARJ21 [wikipedia.org]. The C919 is an Airbus 320 20 years too late. There is no innovation here, just borrowing. That's OK though, right?

    • Re: (Score:3, Interesting)

      by 91degrees (207121)
      The C919 is an Airbus 320 20 years too late

      which was itself a 737, 20 years too late. Boeing are still selling hundreds of 737s every year. Airbus are selling plenty of 320s, many of them to Chinese airlines. There's a market for this sort of aircraft.

      There is no innovation here, just borrowing. That's OK though, right?

      It's business. It's apparently legal, or not obviously illegal enough for any reprecussions, and it makes money. so yes, that's okay.
      • The difference is that when the A320 entered the market, it did not compete against the original 737 (-100 and -200), it competed against the pretty much brand new 737 that had been released at the start of the 1980s (the -300, -400, -500 "Classic" series) - and Boeing found itself in a position where they had to rapidly respond with the 737NG (-600, -700, -800 and -900) early in the 1990s.

        The A320 competed nicely because it came to the market because it had a technological edge that even the brand new
    • by bmo (77928)

      And in 1789, Samuel Slater "borrowed" English technology. There was no "innovation" (so to speak) except carrying the plans in the bloody great cranium of his.

      And he was a hero for it.

      Trying to block off "IP" in this case is shoveling shit against the tide whether you like it or not.

      There is a whole lot of refusing to see all this through the eyes of the Chinese in this discussion by people with their panties in a twist. It's happening folks, the Industrial and Information Revolutions have simultaneously

  • Read Airframe (Score:4, Informative)

    by Goffee71 (628501) on Monday November 15, 2010 @06:50AM (#34229224) Homepage
    The novel by the great, late Michael Crichton, explains all of this in enjoyable detail....
  • by balaband (1286038) on Monday November 15, 2010 @07:13AM (#34229308)
    Chinese have already (successfully) copied fighter planes. Take a look at J-7 (Mig-21), J-8 (Su-15), J-10(Eurofighter), J-11 (Su-27, Su-33). So only thing that is actually new - is that they are making* a new, civilian airplane.

    * When I say making, I think about using blatant copy of some existing design
    • by mjwx (966435)

      Chinese have already (successfully) copied fighter planes. Take a look at J-7 (Mig-21), J-8 (Su-15), J-10(Eurofighter), J-11 (Su-27, Su-33). So only thing that is actually new - is that they are making* a new, civilian airplane.

      But copying passenger jets is very different to copying military jets. A completely different discipline with different goals. If a J11 crashes, 1 military pilot dies and his family may see a cheque from the Chinese government. If a Comac ARJ21 (717 copy) [wikipedia.org] crashes and kills 60 peopl

    • by Richard_at_work (517087) <richardprice@noSPAM.gmail.com> on Monday November 15, 2010 @08:32AM (#34229612)
      The J-10 was not a Eurofighter copy, it was a carry on from the Israeli Lavi project, which was itself built on the F-16. There was a lot of criticism of Israel after they handed the Lavi project lock stock and barrel to China despite it containing lots of classified American technology.
  • Well (Score:4, Interesting)

    by ShooterNeo (555040) on Monday November 15, 2010 @07:15AM (#34229320)

    Over the years I have gradually begun to realize that China developing advanced technology is a good thing for the world as a whole.

    First of all, as China has developed their standards of living and the quality of their products has increased enormously. It is true that occasionally they cut the wrong corner and you end up with lead contaminated products. But the overwhelming trend is towards higher and higher quality, like the Japanese economy was in the 1960s.

    Second, China is now growing past the point of merely copying (or pirating) other nation's technology and is starting to actually create things that were never seen before. That benefits the U.S. as much as it benefits China.

    One concrete example I know of : the smokeless cigarettes that deliver nicotine without the carcinogens were invented by a Chinese scientist. These things are a major advance, and if developed fully could eliminate most deaths from Tobacco usage.

    In the long run, everyone in the world will benefit once China converts even a fraction of it's billion person population into scientists, engineers, and artists.

    • Re:Well (Score:4, Insightful)

      by qmaqdk (522323) on Monday November 15, 2010 @07:40AM (#34229410)

      Just like South America benefited from US prosperity, right?

      I agree that it is a good thing that the people of China are being lifted from poverty. But the rest of the world also needs to be vigilant that Chinese foreign policy doesn't follow the book that the US wrote in South America. An economically prosperous country that controls its media is a very dangerous entity; not as much for its people, but for other nations around the world. And China has a very large presence in Africa at the moment.

      This is actually a rather urgent issue. It's hard for people to be really angry at their government if they are delivering double digit growth. And foreign nations are in an increasingly weaker position to press China on the issues of censorship and human rights.

    • Re:Well (Score:4, Insightful)

      by Kjella (173770) on Monday November 15, 2010 @09:10AM (#34229796) Homepage

      You know, if China was a new US that was upsurping the old US, I'd agree with your sentiment. And as long as China keeps the focus internal and sticks to China's borders the rest of the world will be ok. What is scary is that China is by no means a democracy. It's a country where the government says jump and you ask "How high?" And that country is taking over most of the world's heavy production industry.

      If the relation to China goes sour, it won't be like the Cold War. Then it was US industry versus Soviet industry. It'll be Chinese industry versus no industry. IP agreements depend on enforced contracts, the day China says here are the letters F and U they'll still have all the means to produce, while the US will have nothing.

      I doubt China will try matching the US or Russia on nukes, they have some but that's not so essential. But what if they develop a proper rocket shield? Suddenly you're back to way more conventional warfare, with a billion soldiers and heavy industry now making ammunition and tanks. I'm not always that happy with how the US is the lone dominating military superpower, but as dominating military superpowers go I'd dread to see China in its place.

  • by meburke (736645) on Monday November 15, 2010 @10:51AM (#34230634)

    It is more complicated than the simple knee-jerk reactions I see posted here. China is very productive and has a huge capacity for more productivity. However, China does not produce enough internally to sustain a higher standard of living for their growing population. At this time, they must export in order to create a better standard of living overall. Since they have an absolute competitive advantage in some areas, especially labor-intensive areas, they will export increasingly higher-quality goods to those countries that already have a high standard of living.

    However, Chinese government takes the results of the increased productivity and allocates it to "desirable" industries. At this stage of their economic development this allocation works in many areas, but as the number of subsidized industries increases and mis-allocated funding proliferates, the government burden increases and robs the nation of its productive gains. As costs increase, prices go up both internally and externally, and China loses its absolute competitive advantage. Most of China is so far behind economically that there is a built in sink for productive output at this time, but China must trade with other nations in order to continue to prosper. When they can no longer trade competitively with other nations, those industries that emigrated to China will return home.

    I remember reading a comic, called "Japan, Inc." many years ago, and I wondered then how Japan could sustain its Economic growth while violating these basic Economic principles. Guess what?: A few years later Japan's growth stalled and the absolute advantage went to places like Taiwan, Korea, Malaysia and the Philippines, and now China. Japan is still trying to recover.

    Eventually, in the absence of major wars or worldwide catastrophe, most of the world's economies will be at parity, in which case, the USA will represent about 20-22% of the world consumption and trade. It appears at this time that the last areas to become affluent will be on the African subcontinent.

    China cannot be its own best customer forever. Unfortunately, with increasing public debt and the propensity for the USA to try to spend its way to prosperity instead of produce its way to prosperity, the USA may have some real economic collapse that will adversely affect the rest of the world, and spoil the ride for everyone.

"In matters of principle, stand like a rock; in matters of taste, swim with the current." -- Thomas Jefferson

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