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November 10, 2012

China considers a 16 billion program to develop high performance jet engines

China has failed to build a reliable, high-performance jet engine to end its dependence on Russian and Western makers for equipping its military and commercial aircraft. Aviation Industry Corporation of China (AVIC), the country's dominant military and commercial aviation contractor, is hopeful the government will back a multi-billion dollar plan to build a high-performance engine. China is evaluating a 100 billion yuan ($16 billion) plan to galvanize a disjointed and under-funded engine research effort, aviation industry officials say.

AVIC, a Beijing-based giant, with more than 400,000 employees and 200 subsidiaries including 20 listed companies, has already set aside about 10 billion yuan of its own funds for jet engine development over the next three years.

So China has copied advanced jet airframes (the bodies of the planes) and has the electronics, but they do not yet have good jet engines.

It will likely take China over $100 billion and 10-15 years to catch up in jet engines.



Foreign engine-makers, like General Electric , Snecma, a subsidiary of French aerospace group Safran , Rolls Royce Plc and Pratt & Whitney, a unit of United Technology Corp, have been loath to transfer technology. That has prevented China from taking its usual route to closing a technology gap: copying it.

While AVIC's long-term priority is to develop high-performance engines for military aircraft, it is also trying to design engines for passenger aircraft in the world's fastest growing civil aviation market.

Some Chinese aviation industry specialists forecast that the government will spend up to 300 billion yuan on jet engine development over the next two decades.

Hu called for "major science and technology development plans and achieve major technological breakthrough". He did not elaborate.

AVIC, which is aiming to quadruple its sales to one trillion yuan by 2020 from 250 billion yuan in 2011, has been pouring resources into aviation research, but engine development remains its most challenging task.

"We have seen rapid development of aviation technology, but there is still a big gap with international players in engine technology," Lin said.

Modern jet engine technology is like an industrial revolution in power," said Andrei Chang, a Hong Kong-based analyst of the Chinese military and editor of Kanwa Asian Defence Magazine. "Europe, the U.S. and Russia have hundreds of years of combined experience, but China has only been working on this for 30 years."

Established manufacturers have laboured on research and development since the 1950s to build safe and reliable engines with thousands of components that function under extremes of temperature and pressure. This involves state-of-the-art technologies in design, machining, casting, composite materials, exotic alloys, electronic performance monitoring and quality control.

Since then, the big players have collected vast stores of performance and operational data from existing engines that gives them a head start in designing new versions with improved fuel efficiency and reliability that airlines now demand. And, for commercial engines, all of the design and manufacturing processes must be carefully coordinated and exhaustively documented to satisfy aviation certification authorities.

"The reason so few can do it is because it is really, really difficult," says Richard Margolis, a former regional director of Rolls Royce in northeast Asia.

High performance military jet engines are crucial to Beijing's long term plan to increase the number of frontline fighters and strike aircraft in its air force and naval aviation units. These aircraft are a key element of a long term military build-up aimed primarily at securing military dominance over Taiwan and a vast swathe of disputed maritime territory off China's east and southern coasts.

Due to the export bans on military equipment to China, Beijing has been forced to rely on imported fighters from Russia, reverse engineered copies of these Russian aircraft, and some home-grown designs. This strategy has delivered rapid results. Since 2000, China has added more than 500 advanced fighters and strike aircraft with capabilities thought to equal all but the most advanced U.S. stealth aircraft. At the same time, it has also sharply reduced the number of obsolete aircraft based on Soviet-era designs, military experts say.

The Chinese military is expected to introduce another 1,000 advanced fighters over the next two decades, according to Chinese defence sector analysts. However, anger over reverse engineering and wariness of China's growing military power has made Moscow reluctant to supply engines more advanced than the Al-31. Without imported or locally built versions of these engines, China will be unable to build aircraft that could compete with the latest U.S. or Russian stealth fighters, experts say.

While military jets are strategically important, the commercial market is potentially much bigger. Boeing (BA.N) forecasts China will need an extra 5,260 large passenger aircraft by 2031. Bombardier Inc. (BBDb.TO) projects demand for business jets will reach 2,400 aircraft over the same period. With each aircraft requiring at least two engines plus spares, total demand could reach 16,000 engines with an estimated average cost of $10 million each at current prices.

China plans to compete for some of these aircraft orders with two locally built passenger aircraft, the 90-seat ARJ21 regional jet and the 150-seat C919. GE (GE.N) will supply engines for the ARJ21. CFM International, a joint venture between GE and France's Snecma, won the contract to develop new engines for the C919. Some of these engines will be assembled at joint ventures in China.

Despite the intensified research effort and potential for technology transfer from these ventures, some experts say foreign engines will continue to rule the skies in China. "This won't change for 10 or 15 years," says Chang from Kanwa Asian Defence Magazine.

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