The airlines have grown. It all began (post 1949) with the state airline CAAC, which dispersed in 1987 into a number of regional airlines, all also state-owned. Some of those airlines have now gone public - China Eastern and China Southern are listed in Hong Kong, as is Hainan Airlines. Other airlines, including Shanghai Airlines and Air China, are waiting for the opportunity to list, while other smaller airlines are likely to get forced into shotgun mergers with the main airlines. All the Chinese airlines, still majority-owned by the state, went on aircraft buying sprees in the 1990s, and the result has been temporary over-capacity leading to discounting and price wars. But these airlines are the gatekeepers to one of the world's last remaining frontier markets, and the global aviation industry remains in China's thrall.
The opportunities are vast, given expected economic growth of seven to eight percent per year for several years to come, and an even faster rate of growth for the Chinese airline industry. This provides opportunities not only for Airbus and Boeing, but also for smaller manufacturers. Canada's Bombardier Aerospace Group, for instance, already supplies 50-seater CRJ200 aircraft to a number of Chinese carriers, including China United and Shanghai Airlines. To support further growth, Airbus has invested 80 million US dollars in a customer services training and support center in Beijing. The center contains two flight simulators with plans for a third, and is capable of providing 10,000 hours of training annually for engineers and flight crew. Airbus also has parts production deals with Xi'an Aircraft Company, Shenyang Aircraft Corp, Guizhou Aviation Industrial Group and Chengdu Aerospace Company. Last year, Airbus also announced its plans over the next decade to shift all its production and assembly of A320 wings into China. The Brazilian company Embracer, the world's fourth largest aircraft manufacturer, is also in the process of constructing an aircraft assembly plant in China.
