The report states that Airbus has close ties to the Chinese military-industrial complex.

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A new report shows that Europe’s largest aircraft manufacturer, Airbus, has entered into cutting-edge technology-sharing and production agreements with entities linked to China’s state military apparatus.

The findings will make one wonder how long the European aviation leader can maintain its strong position in the Chinese market through such local partnerships as it faces increasingly tense strategic relations between Beijing and the West and growing calls for less reliance on Chinese manufacturing.

While sales of Boeing aircraft in China have been crippled by the US-China trade war under former President Donald Trump, Airbus has fared better in the country. Since entering the Chinese market in the mid-1980s, Airbus has perfected the art of localization like few other multinationals. It chose the city of Tianjin for its only non-European A330 widebody final assembly line and chose communist party member as CEO, according to a new report from American consulting firm Horizon Advisory.

While many elements of Airbus’s close relationship with China are already well known, researchers Emilie de la Bruyère and Nathan Pikarsik have reviewed open source material, including Chinese sources, to focus more specifically on some interactions with organizations such as AVIC, a state-owned company. aviation-defense conglomerate, as well as the issue of industrial dependencies.

“Airbus’s ties to the Chinese market appear to be fraught with excessive risk,” according to a Horizon Advisory report that was provided to POLITICO in advance. “The interaction between Airbus and China entails significant ties to China’s military and civil-military fusion apparatus, including in the form of supply dependency, technology sharing, and research and development cooperation,” he adds.

Airbus did not respond to requests for comment when asked specifically about the activities in China that are of concern in the report. On its website, Airbus notes that its operations in China are just one element of a larger industrial program in the Asia-Pacific region, saying it has partnerships “with more than 600 firms in 15 countries supplying parts for Airbus aircraft.” .

Horizon Consulting reportfunded independently by the organization itself is likely to cause embarrassment for many EU politicians and legislators who are increasingly skeptical of the traditional way of doing business with China.

China’s aviation sector grew out of the People’s Liberation Army Air Force and was never fully privatized or separated from its military roots. In recent years, President Xi Jinping has called for a “civil-military” merger and has introduced numerous laws and regulations that require a very wide range of companies, especially those in strategic industries and including joint ventures with international companies, to cooperate with the country’s military. and special services.

“Airbus learned its lesson the hard way,” a senior Western defense official said on condition of anonymity due to the sensitivity of the matter. “This has worried some governments… but until recent geopolitics, everyone was enthusiastic about the Chinese market.”

Commenting on the overall business environment, Bart Grothuis, Dutch MEP and defense expert, said: “I think we are still not doing enough to secure our intellectual property in cooperation with China… it is known to what extent our cooperation with Chinese civilian military organizations may lead to the advancement of the Chinese armed forces.”

According to the report, Airbus “carries out its presence in China through a group of at least 10 legal entities, five of which are joint ventures with military-linked Chinese state players.”

At the heart of this is AVIC, or China Aviation Industry Corporation. Airbus keeps 5 percent share AviChina, a Hong Kong registered division of AVIC, as a strategic investor. He continues to own stakes in the company despite seven other AVIC subsidiaries being designated “military end usersin 2020 by the US Department of Commerce under the Trump administration, which urged exporters to step up screening. There are no similar rules in the EU for AVIC or its subsidiaries.

According to Chinese media reports, the Airbus-AVIC joint venture is responsible for this. 5 percent airframe of one of the latest Airbus models, the A350XWB. All Airbus A320 wings assembled in Tianjin will be manufactured by AVIC subsidiary Xian Aircraft Company (XAC), which also designs and manufactures the Y-20 military transport aircraft used by the Chinese military.

“With more than 20 years of partnership with Airbus on the A320 family, XAC has fully mastered the entire set of manufacturing technologies for the A320 wing structure, from component manufacturing, assembly, final assembly to integrated delivery,” said Han Xiaojun, XAC Deputy General Manager. said last month. “This marks another major step in supporting China’s strategic planning towards a transportation superpower, an aviation superpower, and a manufacturing superpower.”

The report indicated that, on a number of occasions, Airbus became dependent on Chinese companies, including those associated with the military, as the sole or near sole suppliers of key parts such as certain types of rudder, elevator and doors.

Future projects in China will include even more sensitive areas. “We are also considering expanding comprehensive cooperation with China in new technology areas such as big data, artificial intelligence and new energy,” wrote George Xu, CEO of Airbus China. article earlier this year “That’s why we chose Shenzhen to build the world’s second Airbus Innovation Center, the only one outside the US.”

There is no indication that any Airbus technology has ended up in the hands of the Chinese military. Airbus did not respond to a POLITICO question about whether the sensitive technology had reached the Chinese military.

On the other hand, the Chinese aircraft manufacturer, the Commercial Aircraft Corporation of China, or Comac, has been gaining momentum in recent years. Last month, Comac made the first test flight of the first C919 jet delivered. Airbus already sees Comac as a long-term competitor.

“Comac is developing the 919, which will be a narrow aisle product that is likely to hit the market. [this] a year or a year later. It will start slowly, probably reaching only Chinese airlines at first. But we believe that gradually he will become a worthy player,” said Guillaume Faury, chief executive of Airbus. said. “So we are likely to grow from a duopoly to a triopoly on at least one pass. [planes] by the end of the decade.”

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