CHINA'S CIVIL AVIATION: EXPANDING WITH WESTERN EQUIPMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00310R000200180002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: September 7, 2010
• Sequence Number: 2
• Publication Date: October 1, 1984
• Content Type: REPORT

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Directorate of
Intelligence 25X1
China's Civil Aviation:
Expanding With
Western Equipment
Secref
EA 84-10186
October 1984
Copy 316
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Intelligence
China's Civil Aviation:
Expanding With
{ Western Equipment
This paper was prepared by
are welcome and may be directed to the Chief,
China Division, OEA
Secret
EA 84-10186
October 1984
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Secret
Summary
Information available
as of 1 October 1984
was used in this report.
China's Civil Aviation:
Expanding With
Western Equipment F
petition from several provincial-level airlines.
The General Aviation Administration of China (CAAC) operates the na-
tional airline and has greatly expanded both domestic and international
operations since the late 1970s. China now has aviation agreements with 46
countries, and CAAC has established business connections with more than
180 airlines throughout the world. CAAC will, however, soon face com-
them obsolete in terms of today's technology
Much of CAAC's expansion has come through the purchase of US pas-
senger jets, and we believe China will continue to depend heavily on Western
suppliers, at least until the 1990s when its aircraft industry may be able to
serially produce a passenger jet. China's acquisition of foreign equipment is
hampered, however, by overlapping organizational responsibilities and a
continuing struggle among Chinese agencies for the final say in aircraft
purchases. CAAC now operates some 20 different types of aircraft, many of
its aircraft to China a number of times.
We believe the Chinese are more likely to buy from foreign firms that
already are purchasing Chinese-produced parts. Boeing, McDonnell Doug-
las, and Canadair all buy Chinese-produced parts and have in turn sold
aircraft. Airbus Industrie recently signed a contract for production of parts
in China, probably because it has failed to make a sale despite having taken
heavy reliance on US companies.
CAAC apparently is well satisfied with US aircraft, and we believe the
United States will remain the major supplier for large- to medium-sized
passenger aircraft. Since the mid-1970s, the United States has been the sole
supplier for the larger passenger jets. CAAC, however, probably will con-
tinue to maintain some diversity in its suppliers, if only to loosen its presently
domestic operations
By 1990, CAAC reportedly hopes to acquire about 100 additional long- to
medium-haul aircraft and another 100 smaller feeder-type aircraft for
domestic services. China recently ordered 25 Canadian-built feeder-type
aircraft and reportedly is in the market for two more Boeing 747s for its new
Australian route. China also has ordered another five medium-haul 737s for
iii Secret
EA 84-10186
October 1984
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Opportunities for foreign sales of ground support equipment will also grow
as Chinese airports and air traffic control facilities are upgraded to handle
modern jets. Modernized traffic control facilities are being installed at key
airports to make better use of CAAC's own diverse inventory and to provide
more sophisticated control of the larger volume of modern jets using China's
airspace. The Chinese claim to have developed a number of international-
class airports, but Beijing and Shanghai are the only two airports now served
by scheduled foreign airlines. Only about 35 of China's 100 airfields now
can handle CAAC's medium-to-large transports. US companies continue to
supply both airport and navigational equipment, but the Chinese also are
approaching other foreign firms for assistance. Most recently, CAAC has
requested bids for airport surveillance radars from Japanese and British
firms
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Organization and Structure of the CAAC
Principal Organizations in China's Civil Aviation Industry
3
Airport Expansion
Traffic and Operations
8
Flightcrews
10
Prospects
11
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Figure 1
Organization of the General Administration of
Civil Aviation of China (CAAC)
Command Bureau International Operations Bureau Political Bureau Services Bureau
(Deputy Director General) (Deputy Director General) (Deputy Director General) (Deputy Director General)
=1
Subelements
a There are subordinate elements at each level in
charge of such functions as air traffic control,
tional aids, finance and accounting, personnel,
fuel and lubricants, and supply.
30388! 10-84
Secret Vi
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Expanding With
Western Equipment
China's civil air sector has displayed phenomenal
growth, especially since the late 1970s. By purchasing
long- and short-range jet aircraft from abroad and
signing a number of air agreements, the General
Aviation Administration of China (CAAC) has ex-
panded the total route mileage, both domestic and
international, by more than nine times since 1970.
CAAC has also upgraded selected air terminals and
runways to handle larger jet aircraft, growing num-
bers of foreign and domestic travelers, and a larger
volume of air cargoes.
Nevertheless, CAAC's aging fleet-more than half of
its aircraft are over 20 years old-and its underdevel-
oped ground facilities are hard put to meet the
increased demand for air services. For instance, the
Chinese admit that only 70 percent of the passengers
who want flights between Beijing and Guangzhou can
be accommodated during the peak tourist season-
August to October. This paper reviews the current
status of China's aviation establishment and its at-
tempts to meet these problems with additional pur-
chases of Western aircraft and ground equipment,
particularly from the United States.
Organization and Structure of the CAAC
Civil aviation in China is administered by the General
Administration of Civil Aviation of China. Formerly
known as the Civil Aviation Administration of China
(CAAC), the organization was renamed in 1962, but
the acronym was retained. Until 1980, CAAC operat-
ed as a special agency of the State Council and was
charged with maintaining and operating China's civil
air transport system. In 1980 CAAC was designated
an independent enterprise-ostensibly free from mili-
tary control-with no change in its duties and respon-
sibilities. In addition to passenger, freight, and indus-
try support operations, CAAC is also responsible for
navigational aids and airport facilities, a function
similar to that of the US Federal Aviation Adminis-
tration (FAA)
The central authority for CAAC administration and
operation is the Main Bureau, located in Beijing. The
Main Bureau constitutes the decisionmaking and staff
body for CAAC Director General Shen Tu and his
deputy director generals (see figure 1 and inset,
"CAAC Officials Most Visible on the International
Scene").'
The Main Bureau is the top administrative level of
CAAC. Four bureaus-titled Command, Internation-
al Operations, Political, and Services-are charged
with overseeing the major functions of CAAC. Each,
in turn, has subordinate offices. The offices are in
charge of air traffic control, aviation, commerce,
communications and navigational aids, finance and
accounting, personnel, POL, and supply. They are
aligned under the four main bureaus and oversee the
main functions of CAAC.
At the second level of administrative control are the
Regional Administration Bureaus (RABs). There are
six regional bureaus-each encompassing three to six
provinces-headquartered at Beijing, Lanzhou,
Guangzhou, Chengdu, Shanghai, and Shenyang.
Each RAB is responsible to the Main Bureau for all
CAAC activity within its jurisdiction. The regional
organizations have departments and subelements that
correspond to the Main Bureau elements except for
the International Operations Bureau.
The third level is the Provincial Administration Bu-
reau (PAB). The headquarters for the 26 provincial
bureaus are usually located at the provincial or
autonomous regional capital cities. The provincial
bureaus are subordinate to their respective regional
bureaus and structurally are carbon copies but on a
more limited scale. Wherever the two are colocated,
the provincial bureau is usually only a shadow organi-
zation, existing on paper but with its functions carried
out by the regional bureau.
' The specific assignments of the deputy director generals are
unknown, but Hu Yizhou, Guo Hao, Yan Shixiang, and Wang
Yamin were identified as deputy director generals as early as Jul
1983. The deputy director title also is used in some subelements7
2.5X1
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CAAC Officials Most Visible
on the International Scene
Shen Tu, CAAC director general since January 1978,
has been with the CAAC and its predecessor organi-
zation for 30 years. Under his leadership, the CAAC
has changed from a semimilitary organization to a
largely civilian airline company. According to a US
Embassy official, he has skillfully cut deadwood and
appointed competent administrators, actions which
have resulted in handsome profits.
Shen has been involved with China's civil aviation
since the early 1950s. He was appointed deputy
director of the CAAC in 1962, a post he held until his
disappearance during the Cultural Revolution (1966-
69). In mid-1973 he reappeared and was again named
deputy director of the CAAC. Shen was elected a
member of the Central Committee of the Chinese
Communist Party in September 1982. A year later he
became China's permanent representative to the In-
ternational Civil Aviation Organization (ICAO). F_
Throughout his career, Shen has been active in
negotiating international civil air agreements. He has
led numerous aviation delegations abroad and has
visited the United States several times. In 1979, Shen
represented China at the signing of an agreement
calling for flights between the United States and
China. He has hosted US civil aviation delegations
and has been associated with China's purchase of
US-built commercial aircraft. In addition, he has
publicly advocated increased cooperation between the
United States and China in aerotechnology.
In early May 1983 he led an official delegation to
South Korea to negotiate the release of a hijacked
CAAC aircraft. Those negotiations constituted the
first official contact between the two countries since
1949. In October 1983 Shen publicly expressed
China's willingness to allow Taiwanese civil airliners
to use the mainland's coastal international airports
in emergencies. He further stated a willingness to
negotiate a civil air agreement with Taiwan.
Li Shrffan, director of the CAAC's International Af-
fairs Department, is one of China's most visible civil
aviation officials. He has served as principal negotia-
torfor the CAAC during bilateral talks with the
United States, Hong Kong, and Japan. In February
1980 he represented China during talks with the
United States for the purchase of a US air traffic
control system. Later that year he headed negotia-
tions to establish direct air service between the
United States and China. In February 1983, when
China threatened to withhold Pan American Airways
landing rights if that carrier resumed service to
Taiwan, he was the chief CAAC spokesman during its
negotiations with Pan Am. He also led similar negoti-
ations between CAAC and Northwest Orient.
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Figure 2
China: Ministries and Their Subsidiaries Involved
in Acquiring Civil Aviation Equipment
Ministry of Aeronautic
Ministry of Foreign
General Administration of
Industry (MAI)
Economic Relations and
Civil Aviation of China
Trade (MFERT)
(CAAC)
---
China Aero-Technology
China National Machine
China Aviation
Import and Export
Import and Export
Supply Corporation
Corporation (CATIC)
Corporation (MACHIMPEX)
The lowest level of administrative control is the Air
Station. This is headed by the Air Station chief who,
with his staff, is responsible to the PAB. The Air
Station is the firstline working level of the CAAC for
day-to-day CAAC operations. Pilots, crews, dispatch-
ers, air traffic controllers, mechanics, load masters,
and other personnel are assigned at the Air Station
level. The Air Station chief and a small staff handle
administrative and support functions
Principal Organizations in China's
Civil Aviation Industry
There is considerable overlap in responsibilities and a
high potential for bureaucratic conflict among the
organizations involved in China's civil aviation indus-
try (see figure 2). Foreign aerospace companies deal-
ing with China have found organizations struggling
among themselves and lines of responsibility unclear.
For example, one company's most recent sales con-
tract was negotiated with China Aviation Supply
Corporation (CASC) where previous sales had been
signed with China National Machine Import and
Export Corporation (MACHIMPEX).
MACHIMPEX is under the Ministry of Foreign
Economic Relations and Trade (MFERT) and is now
the chief negotiator for purchases of civil aircraft and
associated equipment. The Ministry of Aeronautic
Industry (MAI) controls most processes associated
with the civil aircraft industry from basic research
through the manufacturing stage. The China Aero-
Technology Import and Export Corporation (CATIC)
operating under the MAI is involved with joint ven-
tures and offset agreements with foreign companies
for production of aircraft parts and components. It
also plays a role in aircraft purchases. CASC acts as
the purchasing agent for civil aircraft parts and
equipment, navigational aids, and at times for aircraft
for the CAAC.
There have been unconfirmed reports that China has
established a group under the State Council to coordi-
nate China's civil aviation development. The new
group-initially identified as the Civil Aviation Pro-
duction Leading Group-is to reconcile the interests
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of MACHIMPEX, CATIC, and CASC while at-
tempting to develop domestic production capabilities
and match them with end user needs. Past purchases
of aircraft have been delayed because of conflicts of
interest between domestic producers and the end user.
For example, CAAC has sought the outright purchase
of aircraft, particularly the Boeing 700 series, to
increase flight operations. Domestic aircraft produc-
ers, however, are primarily interested in improving
production capabilities and have pushed for the
McDonnell Douglas 80 series for which they have
been negotiating for coproduction since 1978.
Civil Aviation Network
During the early 1970s, China began to expand and
reequip its domestic and international civil air serv-
ices, in keeping with China's increased political and
economic contacts with foreign countries. Until 1973,
CAAC's international routes were confined to the
USSR, North Korea, North Vietnam, and Burma.
Beginning in 1974, when China joined the Interna-
tional Civil Aviation Organization (ICAO), foreign
service has steadily increased. China now has aviation
agreements with 46 countries, and CAAC has estab-
lished business connections with more than 180 air-
lines throughout the world. Only 16 foreign airlines,
however, are serving China, and most are funneled
into Beijing (see table 1). CAAC, on the other hand,
provides regular service to 23 cities in 19 countries,
including Hong Kong.' Its service stretches from
Japan across the Pacific to the United States, and
from South Asia to Eastern and Western Europe and
to Africa (see figure 3). On 5 September, CAAC
began a weekly 747 service to Sydney, Australia, that
significantly increases the length of its international
routes. The length of international and domestic
routes now totals about 376,000 kilometers. Within
China, approximately 180 domestic routes-up from
75 routes in 1971-cover some 150,000 km and
connect 80 cities. CAAC operates more than 670
scheduled flights a week, including flights established
to accommodate the rapidly expanding number of
foreign visitors.
2 CAAC serves Los Angeles, New York, and San Francisco in the
United States, and Nagasaki, Osaka, and Tokyo in Japan. CAAC
Table 1
Foreign Airlines Serving
Chinese Airports
Beijing Airport
Shanghai Airport
Guangzhou
Airport
Aeroflot
Cathay Pacific
None-serves
Air France
Airways
as an alternate
British Airways
Japan Airlines
for some Hong
Ethiopian Airlines
Company
Kong-bound
Iran National Airlines
Northwest Orient
flights.
Japan Airlines
Airlines
Company
Pan American
Lufthansa
Pakistan International
Pan American
Philippines Airlines
Qantas
Thai Airways
International
Tarom-Romanian Air
Transport
Swissair
Airport Expansion
To support CAAC's expansion, China gradually is
improving its airport facilities and associated serv-
ices.' China has about 100 airfields, but only about 35
can handle CAAC's medium-to-large transports.
Most of the remainder have thin macadam or small,
sod runways. The Chinese claim to have developed a
number of international-class airports, but Beijing
and Shanghai Airports are the only two used by
international carriers. Northwest Orient has approval
to provide service to Guangzhou but has not begun
service. Beijing, the largest of the international air-
ports and the hub of the aviation network, rebuilt its
terminal, enlarged one runway, and added another to
support a rise in wide-body jet traffic. Beijing handles
most of the international flights-some 70 a week.'
' Although CAAC owns and operates the larger civil airports, the
Chinese Air Force owns and operates man of the airports into
which CAAC has scheduled operations.
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' According to the China Daily, the busiest airports are Beijing,
Shanghai, and Guangzhou, which together handled almost 90
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0GCl GL
Figure 3
1. Addis Ababa
8. Guangzhou
15. Manila
22. Rangoon
2. Ash Sharigah
9. Hangzhou
16. Moscow
23. San Francisco
3. Baghdad
10. Hong Kong
17. Nagasaki
24. Shanghai
4. Bangkok
11. Karachi
18. New York
25. Sydney
5. Belgrade
12. Kunming
19. Osaka
26. Tianjin
6. Bucharest
13. London
20. Paris
27. Tokyo
7. Frankfurt
14. Los Angeles
21. Pyongyang
28. Zurich
eon?da,y Sawa e~,iaho~, ~.
China
Civil Air Routes
Summer 1984
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CAAC has only recently begun to improve its ability
to deal with aircraft fires, and then only at its major
airports. For example, CAAC has vastly improved
Beijing Airport's firefighting capabilities through the
purchase of US-made firefighting equipment. Earlier
this year, CAAC reportedly gave a well-rehearsed
drill of the new equipment extinguishing a simulated
fire on board a 707. The plane-haffilled with
CAAC employees-was foamed down while employ-
ees were "smoothly" evacuated before the invited
representatives of every foreign airline serving Beij-
ing. In a similar drill conducted two years earlier,
firehoses on Chinese-made equipment leaked in ev-
eryplace but where they should have,
CAAC has yet to conduct an unrehearsed fire drill.
The interest in Western firefighting equipment proba-
bly stems from a 1980 aircraft fire which CAAC was
ill equipped to handle-reportedly the firetruck had
neither foam nor water in its tank.
facilities are being installed at key airports to make
better use of CAAC's current inventory and to pro-
vide more sophisticated control of the larger volume
of modern jets using China's airspace. At its most
modern airports-Beijing, Shanghai, Guangzhou-
China has installed conventional avionics and flight
control equipment capable of handling current traffic
volume: low-frequency, nondirectional beacons
(NDBs); very-high-frequency omnidirectional range
stations (VORs); instrument landing systems (ILSs);
distance measuring equipment (DME); and precision
approach radars.
Most large airports have a precision approach radar,
but only the largest have an instrument landing
system. At the smaller airports, rudimentary en route
navigational aids and airport control facilities now
generally limit operations during periods of darkness
and bad weather. Those airports having no electronic
glide slope provide VOR and NDB signals for use in
standard instrument approach procedures.
CAAC is modernizing and expanding its air traffic
1 -1 control system with air surveillance and computer-
Shanghai and Guangzhou Airports-primarily used
by foreign businessmen and tourists--have been only
slowly developed in response to growing needs.
Guangzhou serves mainly as a feeder and alternate
airport for Hong Kong. In the far west, Urumqi-an
international-class airport in Xinjiang Province that
now handles no foreign carriers-has been expanded
to handle large jet aircraft
Additional airports for handling wide-body jets are
scheduled for expansion, are under construction, or
have been completed recently. The airports at Tianjin
and Hefei have been upgraded to serve as alternate
airports for Beijing and Shanghai, respectively. Up-
grading of runways for jet traffic has been completed
at Chengdu, Guilin, and Wuhan, and new jet airports
have been built at Harbin and Xiamen. Airports at
Changsha, Dalian, Hohhot, Kunming, and Shantou
are also to be upgraded for larger jetliners (see inset,
"A Chinese Fire Drill").
Air Traffic Control
Air traffic control is generally adequate for the
amount of daily traffic now handled, which is less
than 1 percent of the volume handled daily in the
United States. However, modernized traffic control
automated radars purchased from Western sources.
French-made Thomson-CSF LP-23 and TA-10 ra-
dars have been installed along the Beijing-Shanghai
air corridor. The Chinese reportedly have had a
number of problems with the French equipment and
are looking elsewhere. Terminal and en route auto-
mated systems along the Beijing-Shanghai corridor
provide tracking data such as altitude, ground speed,
and identity of transponder-equipped aircraft. An
automated TPX-42 supplied by the AIL Division of
Eaton Corporation, a US company, provides automat-
ed radar service at the Guangzhou Airport. According
to trade journals, the Chinese are negotiating for four
more AIL systems for installation at interior airports.
CAAC is just beginning to upgrade and expand its
limited air navigation network. Some 70 NDBs and
about 18 VORs are the backbone of the basic air
navigation system. The sparse network of VORs-
some 95 percent less than the number available in the
US network-partly explains the Chinese use of five-
man flightcrews that include a navigator and radio
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Table 2
CAAC's Civil Aviation Fleet a
B-747SP
4
B-747-200 Combi
1
B-737-200
5
5
B-707-320B
4
5
430
a Trainer aircraft are not included in inventory.
b The Chinese have another 16 Tridents that alternate between
military and civilian control.
c The Chinese reported producing some 700 Yun-5s that are being
used for agricultural support, cargo, passengers, and aerial ambu-
lances. We do not know how many of these 700 are actually flying
under CAAC control.
320
2
AN-24/Coke 29
LI-2/Cab 12
IL-12/Coach 4
IL-14/Crate 43
IL-18V/Coot 10
Helicopters 29 6
d Although 24 helicopters were ordered by civilian agencies, we
believe most, if not all, will be operated by the military.
e Ordered for VIP transport, but we do not know if they will be
operated by civilian, military, or Public Security Bureau personnel.
operator. In many cases, VOR signals only are receiv-
able in aircraft operating above 20,000 feet, even
along major airways. Aircraft operating at lower
altitudes, especially in the interior, depend on NDB
equipment.
Civil Aircraft Fleet
The Chinese penchant for multiple suppliers and
earlier reliance on the USSR have given CAAC one
of the world's most diverse air fleets (see table 2).
CAAC had 157 aircraft in its passenger fleet in
August 1984 and over 400 smaller aircraft in special-
ized aviation services. The fleet uses some 20 different
types of aircraft, many of them obsolete in terms of
today's technology. CAAC service began with Soviet
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aircraft; AN-12s, AN-24s, IL-I4s, IL-18s, and IL-
62s still constitute a large portion of its passenger
fleet. Through 1970 the fleet consisted mostly of
piston-driven propeller aircraft. By 1971 China had
acquired the Soviet IL-62, CAAC's first long-range
jet aircraft. At the same time, China acquired its first
medium-range British-built Trident jet. By the late
1970s, the Chinese had acquired more than 30 Tri-
dents, mainly for domestic flights, and 10 long-range
Boeing 707s, mainly for use on the international
routes.
CAAC expansion during the 1980s has been largely
with US-built passenger jets. In 1980, the Chinese
acquired three long-range wide-body Boeing 747SPs
in an attempt to compete with foreign airlines. Since
then, CAAC has acquired another 747SP and a 747-
200 Combi. In 1983, CAAC began purchasing shorter
range aircraft-five Boeing 737s and two McDonnell-
Douglas MD-82s. Another five Boeing 737s are to be
delivered by March 1986. However, the addition of
these new aircraft has not led to the rapid retirement
of the older Trident or Antonov aircraft as expected.'
Many of these aircraft are still used because of the
low utilization rate of Western aircraft, in part attrib-
utable to a lack of qualified crews.
language problems are making it
difficult to shift flight and maintenance crews from
the older Soviet aircraft to new Western aircraft.
Aircraft crews, long proficient with Russian from
handling Soviet aircraft, now find it difficult to
familiarize themselves with English manuals. More-
over, older aircraft still are needed because traffic
volume over the past few years has grown faster than
new aircraft acquisitions.
CAAC apparently is well satisfied with the perform-
ance of US aircraft. Since the last British Trident was
delivered in the mid-1970s, the United States has
been the sole supplier for the larger passenger jets.
aircraft have been retired, crashed, or sold since January -six
Viscount-843s, seven LI-2s, and two Tridents. The Tridents were
lost in 1983 accidents-one charged to error by a military air
traffic controller and the other was hit by a military fighter aircraft
while taxiing. he Chinese will phase out
the Soviet IL-62s, a 162-passenger transport purchased in 1971,
because CAAC does not intend to replace the wings when the
aircraft reach the 15,000-hour wing replacement ceiling. The IL-62
was designed for military requirements where flight frequency is
much lower than in airline use. Two of the five IL-62s will hit the
CAAC has told the Chinese press that about 100
long- to medium-haul aircraft and another 100 small-
er aircraft are needed for expanding domestic service
between 1983 and 1990.
CAAC will soon need to acquire two more
747s for the new Australian service. And last July,
China ordered 25 of the
19-passenger Challenger 601 twin-jet Canadian air-
craft for delivery beginning in September 1984.
In addition to passenger-cargo aircraft, the Chinese
use over 400 aircraft in specialized aviation services.
Only a few US-built aircraft have been purchased for
this sector. Cessnas and Beechcrafts are being used to
flight-check navigational aids and for aerial and
geological survey work. A few US-built helicopters
provide air service to offshore drilling rigs. The Soviet
AN-2, and its Chinese copy, the Y-5-a single-engine
general purpose aircraft-are used for agricultural
support and as aerial ambulances as well as for
ferrying passenger-cargo traffic into small airfields.
The lone Y-7, a Chinese version of the Soviet AN-24
twin-turboprop transport, began passenger operations
out of the Shanghai Bureau earlier this year. We
expect that more of the 50-seat Y-7s will be added to
the CAAC's inventory as they come off the newly
opened production line at the Xian aircraft factory.
Two newly acquired four-engine turboprop Y-8s are
being used as multipurpose cargo carriers on the
Lhasa-Chengdu run.
Traffic and Operations
Although it provides a number of specialized services,
civil aviation's contribution to the total transport
sector is minor when compared with rail, water, and
road services. The volume of cargo is small, and
passengers are mostly government officials and for-
eign visitors. China has, nevertheless, expanded cargo
and passenger volume on both domestic and interna-
tional flights (see table 3). From 1975-83, air freight
turnover has risen at an average annual rate of 18.2
percent. Between 1980 and 1983, freight turnover
increased at a near steady rate, averaging 17.8 per-
cent a year-from 140 million ton-kilometers to 229
million ton-kilometers in 1983. During 1981 and
1982, passenger turnover had grown at a slightly
faster rate of 22.5 percent until leveling off last year.
15,000-hour ceiling before the end of 1984.
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Table 3
China: Civil Air Performance
Table 4 Thousand persons
Tourists Visiting China a
Freight Turnover
Passenger Turnover
(million ton-
(billion passenger-
kilometers)
kilometers)
Total 1,809
5,703
9,500
Overseas Chinese b 1,580
5,703
8,627
Foreigners 229
529
873
Of which:
1980
1981
140
170
1982
1983
200
229
4.0
5.0
6.0
5.9
Passenger turnover in 1983 was down about 100
million passenger-kilometers, largely as a result of
domestic travel restrictions imposed after a CAAC
aircraft was hijacked to South Korea. With the lifting
of restrictions, passenger traffic in 1984 is expected to
resume its rapid increase. At least part of this growth
in passenger transport can be attributed to the in-
creasing number of tourists since 1978 (see table 4).
Some of the freight increase is a result of China's
recent entry into the field of containerized air ship-
ments (see inset, "Growing Number of Tourists").F-
The present CAAC fleet is underutilized. Chinese
aircraft average about three hours a day in the air; in
most industrial nations, the average is about eight
hours a day per plane.
CAAC is beginning to make better use
of US-built aircraft.6 Management practices, as well
as the small number of qualified aircrews, probably
account for the underutilization rate rather than a
poor maintenance program.
Customer Service. Sudden flight cancellations and
difficulty in making reservations are the most fre-
quent criticisms of CAAC. Foreign travelers fre-
quently encounter crowded flights with passengers
6 For December 1983 through March 1984, the daily utilization
rate for US aircraft was-five hours for 747s, nearly four hours for
707s, and three hours for the new 737s. By August 1984, the 737s
a Excluding official, professional, and scientific delegations; also
businessmen visiting trade fairs.
b Including visitors from Hong Kong and Macau.
occupying makeshift seats or, at the other extreme,
flights that are canceled because of too few passen-
gers. Darkness and bad weather also produce un-
scheduled stopovers, because CAAC plays it safe with
its relatively sparse network of navigational aids.
CAAC is attempting to correct both problems with
modern equipment. The most recent effort is the
introduction of computerized reservations for the busy
Beijing-Shanghai route. The Beijing-Shanghai air
corridor also is the only corridor with computerized
radar tracking. CAAC plans to computerize reserva-
tions on other major domestic routes within the next
year and, eventually, the whole system
Computerized reservations probably will not add
much to CAAC's service. Many of its problems stem
from its regional bureaus; these jealously control
ticket sales for flights originating in each region.
Passengers must pick up their tickets in person and
round trip tickets are unheard of. CAAC also is not
overly concerned with in-flight service. There are no
full meals on domestic flights, only snacks. Service on
CAAC's international flights is not much better.
Although Beijing Airport's in-flight kitchen prepares
quality meals under a venture with a Hong Kong
firm, CAAC purchases half-price meals-20 yuan
each-of much lower quality than do the flights of
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Since opening the gates to tourism in 1978, the
tourist industry has become one of the most rapid
growth industries in China-earning some $900 mil-
lion in 1983 and greatly increasing the demand for
air transport. Between 1978 and 1983, the total
number of overseas Chinese and foreign tourists
increased more than five times. The number of
foreign tourists actually grew less rapidly-3.8
times-largely because of a shortage of hotel rooms
(see table 4). According to a report on tourism
approved by the State Council, China plans to attract
3 million foreign visitors by 1990. The large number
of Australian tourists accounts for China's interest in
opening air service to Australia.
Flightcrews have little opportunity to exchange expe-
riences or broaden themselves because they tend to
remain in the regional bureau with which they start-
ed. Probably because of the shortage of flightcrews,
crews are almost never transferred to a different
region. Even the temporary loan of an exceptionally
skilled pilot to another region for a couple of weeks
proved to be a very difficult task for one foreign
company to arrange. The practice of typing flight-
crews according to the range of the aircraft they have
previously flown also reduces the flexibility of crew
scheduling. For example, a 737 captain does not
become a 747 copilot as could be the case with a US
airline. In China, flightcrews selected for training in
the 747 had operated the long-range 707, and those
selected for the short-range 737 had previously flown
Tridents or Antonovs.
In-flight entertainment, however,
has improved significantly,
passengers no longer encounter a
stewardess leading sing-alongs of Chinese revolution-
ary songs as was the case in 1979; but, as other
travelers report, they still engage in swatting flies.
Flightcrews. Flightcrews tend to disregard standard
safety checks and drills common to Western airline
operations. Instructions on fastening seatbelts and not
smoking during takeoff and landing frequently are not
given on domestic flights. Pamphlets on procedures to
be used in case of emergency generally are missing.
Moreover, safety checkouts of the flightcrews and
periodic emergency procedure drills for the flight and
cabin crews are not mandatory and are not regularly
Maintenance. Although the pool of trained manpower
is small, CAAC capabilities for performing routine
maintenance could support additional flight time.
Scheduled overhauls on jet-powered aircraft present
no problem because they are generally contracted out
to foreign-based firms. For instance, scheduled over-
hauls for Boeing 707 aircraft have been done under
contract by a Hong Kong-based firm since 1973.
CAAC, however, is attempting to upgrade its engine
maintenance capabilities and is actively seeking the
necessary equipment and test stands. The CAAC is
also anxious to obtain a US Federal Aviation Admin-
istration repair station certificate. Without the certifi-
cate, CAAC maintenance crews cannot maintain US-
flag aircraft serving China (see inset, "Airworthiness
Certification").
Maintenance on the older piston-engine aircraft and
turboprop aircraft is done domestically. Chinese
maintenance crews for 747s and 737s have had some
training in the United States. Chinese maintenance
crews reportedly are not as well prepared as most
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Since 1980, the Chinese have repeatedly approached
US officials and company representatives for assist-
ance in meeting the basic requirements for a bilateral
airworthiness agreement. China's aircraft manufac-
turers particularly want FAA-type certification to
make their products more attractive on the world
market. Under a 1982 revision in FAA policy, Chi-
nese manufacturers are exporting more complex
parts and components to US aircraft companies.
Previously only the simplest parts that could be
easily inspected were being shipped to the United
States. The long-term goal is to produce a passenger
aircraft under certification for the world market. To
this end, the Chinese are negotiating the coproduction
of a feeder-type aircraft with two US companies. We
believe the Chinese aircraft industry would greatly
benefit from the experience of either US company,
much more so than if they tried to upgrade a
domestically produced aircraft such as the Y-12 for
certification.
The Chinese have found the certification process
much more complex than they first envisioned. There
currently is no FAA-type organization in China. And
within the various Chinese organizations involved in
aviation, no organization has the authority to over-
ride another and to ground aircraft that are deemed
unsafe.
students upon arrival at the training site. But with
dedication and hard work, they get top grades and
leave with a good working knowledge but limited
Moreover, maintenance personnel trained in the Unit-
ed States on earlier purchased 707 aircraft have not
reappeared as maintenance trainees for 747 or 737
aircraft. Each purchase thus produces a new set of
trainees with only a limited exposure to high-tech
aircraft. This lack of experience can cause problems
as in Guangzhou, where all the wheels on the new
737s recently had to be replaced because of excessive
corrosion. Chinese maintenance personnel had been
polishing the wheels with a stone device which re-
moved all the anticorrosion materials that had been
applied at the factory.
CAAC has four maintenance bases for its fleet of
more than 500 aircraft. Beijing, its largest base, is
responsible for maintaining the larger jets-mainly
707s, 747s, Tridents, and the Soviet IL-62s. Chengdu
takes care of medium-sized aircraft and two 707s.
Shanghai does the maintenance on the MD-80s and
two 707s in addition to smaller aircraft such as the
AN-12s. The new 737s flying routes in southeast
China are maintained in Guangzhou.
Prospects
China will have to depend on foreign aircraft suppli-
ers for continued expansion of commercial aviation
until its aircraft industry has a jet passenger plane in
serial production. To this end, China's aircraft indus-
try is attempting to improve its capabilities through
agreements with foreign firms, especially with US
aircraft manufacturers for whom some Chinese air-
craft plants are producing parts. The Chinese contin-
ue to express a preference for US-built passenger
aircraft over those manufactured by other foreign
firms. However, China probably will continue to
maintain some diversity in its suppliers if only to
loosen CAAC's presently heavy reliance on US com-
panies. In general, we believe the Chinese are more
likely to buy from foreign firms that already are .
purchasing Chinese-produced parts. Boeing, McDon-
nell Douglas, and Canadair all buy Chinese-produced
parts and have in turn sold aircraft. Airbus Industrie
recently signed a contract to produce aircraft parts in
Airbus is probably following US and Canadi-
an examples in its efforts to crack the Chinese
market. Airbus has taken its aircraft to China a
number of times and has given Chinese aerospace
officials the "royal treatment" on European visits, but
it has yet to make an aircraft sale to the Chinese.
China has always constructed its own airports and
until recently only made limited purchases of foreign
navigation equipment. The new Xiamen Airport was
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constructed with the help of a long-term loan from
Kuwait and the installation of navigational aids sup-
plied by Northrop's Wilcox Electric Division. In
addition to the ILSs, DMEs, and radars already
purchased from US companies, the Chinese are look-
ing at more US-built navigational equipment for
future airport expansion. However; the Chinese also
are contacting other foreign firms.
According to the Chinese press, CAAC will soon face
competition from several provincial airlines. New
airline service is planned for Fujian, Guangdong,
Guangxi, Shanghai, and Xinjiang Provinces.
CAAC already has delegated
authority to selected political administrators at local
levels to negotiate joint-venture agreements for air-
craft services and even for the purchase of aircraft.
Press reports indicate local officials in Fujian Prov-
ince already have organized a joint venture with
Hawaiian-based Aloha Airlines and signed an agree-
ment with Philippine Air Lines for flights between
Manila and Xiamen where a new international-class
airport was completed recently. Wuhan City and the
Chinese Air Force's Wuhan Command began operat-
ing a one-aircraft cargo airline between Wuhan and
Guangzhou on 8 September. This joint military-
civilian airline plans to establish passenger service
both domestically and on international routes. While
these policies of decentralization may make CAAC
more efficient by providing competition, we suspect
the effort will further complicate negotiations be-
tween Western suppliers of aircraft and equipment
and Chinese aviation entities.
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