The Political Economy of Industrial Policy in China: The Case of Aircraft Manufacturing

Abstract

In this paper, the focus is China's efforts to build a world-class aircraft manufacturing industry. In the first half of the 1990s, the potential of the Chinese industry to mount a competitive challenge to Western aircraft builders was largely discounted. Nowadays, as China strives to bear the ARJ-21 project to execution and even considers entering the market for wide-bodies, the threat is taken more seriously. The growth in the Chinese air transport market has reinforced the bargaining power of national aircraft producers and authorities are giving priority to building science and technology capacity in this area. Progress in creating military/civilian synergies has proven much more modest - especially when compared to the shipbuilding industry - and better coordination in the overall industry comes a distant fourth in the explanations' peaking order.

Keywords: Aerospace, China

JEL Classification: H11, L62, O14