China and Russia Take on Airbus and Boeing With New Plane
May 23 2017 - 8:11AM
Dow Jones News
By Trefor Moss
SHANGHAI--China and Russia have joined forces to build a large
passenger airliner designed to challenge Airbus SE and Boeing Co.,
in the latest sign of strengthening Sino-Russian ties.
State-owned aerospace giants Commercial Aircraft Corp. of China
and Russia's United Aircraft Corp. say they are forming an alliance
to build a 280-seat long-haul plane that will enter service in the
mid- to late-2020s.
The deal was signed at a ceremony in Shanghai Monday,
formalizing plans set out in a 2016 memorandum.
China and Russia have been developing rival jets as they both
seek to pry open Airbus and Boeing's duopoly in the single-aisle
jet market. China's new C919 airliner flew for the first time in
early May, while Russia's MC-21 is expected to conduct its maiden
flight within the next few months.
Both aircraft face uncertain commercial futures, aviation
analysts say, thanks to the American and European companies'
dominance and their technical advantages, including greater fuel
efficiency.
Teaming up allows the two countries to pool know-how and
resources in developing the larger, twin-aisle jet that China is
calling the C929. Beyond the commercial potential, the tie-up also
reflects a decadeslong warming in relations between Beijing and
Moscow--bitter rivals until the end of the Cold War--that has
accelerated under Presidents Xi Jinping and Vladimir Putin.
"China needs Russia's military technologies and energy
[resources] ... Russia needs China's financial help," said Zhang
Baohui, a professor at Hong Kong's Lingnan University. "They want
to refashion the global order, " he said, and "develop a genuine
strategic partnership to counterbalance U.S. power."
Increasingly, Beijing and Moscow give each other mutual support
on key global issues, said Mr. Zhang. Last September, the Chinese
and Russian navies held joint drills in the disputed South China
Sea, which is claimed almost entirely by China, and in part by
several Southeast Asian countries.
China and Russia agreed to develop a new heavy-lift helicopter
together during a visit to Beijing by Mr. Putin last year, and
opened talks about joint space projects, including a possible
mission to Mars. The Russian leader was back in Beijing this month
to attend the summit on Mr. Xi's flagship One Belt One Road
regional trade and infrastructure program.
The two governments are aiming to grow bilateral trade fivefold
to $200 billion by 2019-23, they said during recent trade talks in
St. Petersburg.
The airplane joint venture will be based in Shanghai, with a
Russian chairman and a Chinese general manager, the partners said
in a statement, and will be built in the Chinese city. No financial
details were disclosed.
The widebody jet market is forecast to be lucrative as global
demand for air travel surges: Airbus estimates roughly 7,500
twin-aisle jets valued at more than $2 trillion will be sold
world-wide over the next two decades.
Write to Trefor Moss at Trefor.Moss@wsj.com
(END) Dow Jones Newswires
May 23, 2017 07:56 ET (11:56 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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