Sanctions may clip China-US business ties
08:11, February 05, 2010
The unspecified sanctions on US firms, however, are an appropriate measure by the central government, reaffirmed Foreign Ministry spokesman Ma Zhaoxu yesterday.
China has reacted swiftly to US President Barack Obama's approval in late January of an arms sales package to Taiwan worth $6.4 billion.
The announcement, along with Obama's scheduled meeting with the Dalai Lama and his sharp criticism of the renminbi, have soured relations between the two nations in recent weeks.
Among the US companies reportedly selling arms or equipment to Taiwan are Boeing, Lockheed Martin, Raytheon and United Technology. So far, two major domestic airlines, Air China and China Southern, have said they will stand with the government.
At present, domestic airlines buy some 150 planes from Boeing and Airbus SAS, based in France, each year. Air China and several other domestic airlines have placed 57 orders for Boeing's 787 dreamliners.
Boeing planes, by June 2009, accounted for 53 percent of China's fleet of 1,383 civil airplanes, according to the company's website.
Approximately 500 planes, or 36 percent of the fleet, are Airbus planes.
Airbus SAS has raised its Asia-Pacific demand forecast by about 4 percent, with carriers in the region buying approximately 8,000 planes worth $1.2 trillion over the next 20 years. China, a rapidly growing market in the airlines industry, is slated to buy a third of those planes.
Feng Fuzhang, an aviation manufacturing analyst with CITIC China Securities, said if Boeing is among the list of sanctioned firms, it will benefit Airbus SAS.
"(Boeing's) products are highly replaceable," he said.
China's jumbo jet producer said its purchases from foreign suppliers would not be affected by the government's planned sanctions against US firms.
Yuan Wenfeng, deputy director of the project management department of Commercial Aircraft Corporation of China Ltd (COMAC), made the remarks during the Singapore Air Show, when asked of the possible impact of the unspecified sanctions, Beijing Business Today reported yesterday.
COMAC is scheduled to nail down suppliers of major parts for the C919, China's first jumbo jet, in the first half of this year. Its scheduled maiden voyage is set in 2014 and deliveries will start in 2016.
The C919 is a single-aisle jetliner designed for short- to medium-range hauls up to 5,555 km.
So far, COMAC has picked CFM International as its only foreign supplier for engines on the C919. CFM is a joint venture that US-based General Electric and France-cased Safran SA both hold a 50-percent share.
Reaction from analysts about the sanctions' impact has been mixed thus far. A researcher in the aviation manufacturing industry, who insisted on anonymity, said China's sanctions will have impact companies in both countries.
"The jumbo jet project needs suppliers from countries that include the US," he said.
But other analysts have maintained that the impact on the C919 project will be limited.
Feng Fuzhang said at present, most parts of the C919 can now rely on domestic manufacturers.
"Besides suppliers from the US, COMAC also has options like suppliers from Europe and even Russia," he said.
To shake off its dependence on foreign suppliers, China is also developing its own engines for the C919.
The domestically developed engine is scheduled for completion by 2016 when the C919 will be delivered for commercial use, said Zhang Jian, general manager with AVIC Commercial Aircraft Engine Co Ltd.
COMAC expects to sell 2,000 C919 jets over 20 years, and by then, China could reduce its reliance on Boeing and Airbus.
COMAC will begin receiving orders for C919 this year, Yuan Wenfeng said.
The letter C in the C919 represents China as well as COMAC. The first numeral "9" implies "forever" in Chinese culture, and 19 means the jet will have 190 seats.
A list of US companies involved in the arms sale has not been revealed and it remains uncertain which companies are possibly involved.
Source:Xinhua
A Chinese official warned U.S. President Barack Obama not to meet with the Dalai Lama, and reiterated "no room for negotiations" on China's sovereignty over Tibet, according to a report February 3 by the Global Times,
Some analysts believe that the chaotic China-U.S. relationship will shortly enter a new round of conflict – the "Dalai Round."
The China-U.S. relationship has undergone drastic changes within a period of only 1 month in early 2010. The Dalai Lama, who is just like an old drum that has nearly been cracked by the west and China, is likely to bring this round of the China-U.S. conflict to a climax.
"The Dalai Round will give the U.S. more excuses for its series of offenses against China, but it will also make Chinese society more united under pressure from the west.
Facts prove that playing the drum of the Dalai Lama will consolidate the ideological positions of both the west and China," Niu Xinchun, a Chinese scholar, told Global Times February 2.
Analysts believe that the conflicts surrounding the Dalai Lama are likely to bring about 2 results.
Firstly, this round of worsening in the China-U.S. relationship will become irremediable as the 2 countries' patience is ruined by the Dalai Lama who acts as the "last straw."
The other result is that Obama will drop all the bombs in early 2010, rapidly completing his performance of "defying China," before "relaxedly" restoring the China-U.S. relationship later.
The key is why the Dalai Lama is so confident that China will cooperate with him to do this? The answer is that the bet he has made is too big.
Li Wei, director of the Institute of Security and Strategy at the China Institute of Contemporary International Relations told Global Times that Obama may still meet with the Dalai Lama. "After 1 year in office, Obama now finds that his approval rating is not as high as in the past. Meeting with the Dalai Lama may divert the American people's attention and enable Obama to win more political support."
On the other hand, the Dalai Lama will have more cards to play in negotiations with the central government if he can meet with Obama. China cannot give other people the opportunity to distort the facts on issues related to its core interests. "Today's press conference proves that China has become more positive and mature."
Wu Xinbo, vice director of the School of International Relations and Public Affairs at Fudan University said during an interview with Global Times that all the events recently taking place are an intensive release of the negative inertia resulted from U.S. policies toward China. The existing problems have not yet disappeared and China will still encounter attacks from the U.S. despite the fact that the China-U.S. relationship has been enhanced to a certain degree. As China's power grows, China must take new and effective measures to handle all existing problems. That is to say, China should prevent problems from emerging in advance. Economic measures are effective measures which China can adopt to cope with the U.S.
The events will inevitably create an impact on the U.S. China will draw lessons from the events after this round of struggle comes to an end when it becomes aware of whether the situation will develop towards a positive direction or a negative direction. Nonetheless, there is an essential difference between these events and events occurring in the past: China wants to change the rules of the game. China criticized the U.S. for arms sales to Taiwan in the past, but this is the first time that China has taken effective countermeasures, said Yuan Peng, an international events expert.
Global Times contributes to this article.
By People's Daily Online
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