Numerous different interpretations of the technical considerations and overall issues of national interest have been presented in the China Airlines aircraft procurement case. US government officials, including the de facto ambassador to Taiwan, Douglas Paal, have come forward to intercede for Boeing. Under these circumstances, what inconvenience is there in the government expressing its opinion on the matter? Isn't the government duty-bound to do the important work of pursuing the interests of Taiwan's private sector?
Actually, both of the overseas aircraft manufacturers competing for China Airlines' favor -- Boeing and Airbus -- are far more concerned with the aviation market in China than they are with that in Taiwan. The reason is simply China's vast population of 1.2 billion and its potential for economic development.
A rough comparison of the current fleets indicates civil aircraft ordered and delivered to Taiwan amount to one third of those in China's fleet. Comparing seating capacity, Taiwan has approximately half that of China because Taiwan has a higher percentage of large, wide-bodied passenger aircraft.
Comparing the markets for military aircraft on each side of the Taiwan Strait, Taiwan has purchased 150 F-16s as well as quite a few C130 transport air-craft, Boeing CH-47 helicopters and other military aircraft such as E-2 early-warning aircraft, S-70 helicopters, and so on from the US. We also have 60 French Mirage-2000s produced by Dassault Aviation.
By contrast, military aircraft from Western countries are very rarely exported to China. Apart from a few Dauphin helicopters made by Eurocopter, and some Russian Sukhoi fighters, most Chinese military aircraft are manufactured domestically. In other words, the value of military aircraft purchases by Taiwan is in fact equal to Europe's and North America's expectations of the value of China's aviation market. But how are the US and France treating Taiwan?
Europe and the US developed their aerospace industries early. They have advanced technology and well-developed markets. Asian countries, including China, Japan, South Korea and Taiwan, all got a late start. In the last decade or so, however, there have been major changes in the international economic environment. Because the aerospace industry is viewed as an indicator of development, newly industrialized countries often include this industry among their development priorities and Taiwan is no exception.
But the brands and technical know-how associated with this industry have long been monopolized by Europe and North America. Since the international civil aviation industry has a
complex and comprehensive system of recognized standards, how can a nation that is a late arrival to the industry enter easily? The best way to get a foot in the door is by issuing demands to accompany aircraft purchases.
China is a case in point. Both Boeing and Airbus have entered into many contracts with China. But, regrettably, although Taiwan has invested heavily in both civil and military aircraft, all we have got in return is a contract for the state-run Aerospace Industrial Development Corporation (漢翔公司) to produce tail sections for the Boeing 717, a model soon to be discontinued, and some contracts to produce spare parts in return for our purchase of 150 F-16s. The case of the French Mirages is the same. The only contract resulting from the purchase was for the trifling job of producing directional rudders for the planes.
Over the last decade, Taiwan's aerospace industry has had no means of taking advantage of the opportunities that come with aircraft purchases. Without affecting the interests of the airlines, the aerospace industry could benefit greatly from these purchases. The manufacturing standards of Taiwan's private sector and its ability to integrate research and development with engineering practices have already achieved the levels of advanced nations. The only thing missing is an opportunity to join the game. Given a true commercial opportunity, very few private companies are unable to meet the so-called "recognized manufacturing standards" of those giant international firms.
In Europe and the US, engineering and manufacturing face major competitiveness problems. The same quality, the same manufacturing techniques and lower costs -- is this not a basis for mutual benefit?
Taiwan's imports of aviation parts and products amounted to NT$43.7 billion and NT$63.1 billion respectively. In contrast, the record for exports amounted to only NT$3.6 billion and NT$4.5 billion respectively.
Obviously in Taiwan, for all the emphasis on developing an export economy, production value from the aerospace industry is remarkably low. No doubt there are many reasons for this, but I believe that seizing the opportunities that come with making aircraft purchases is a method we must consider seriously in order to develop Tai-wan's aerospace industry.
In this controversial aircraft procurement case, let us not lose sight of where the nation's great-est interest lies. Apart from diplomatic and political considerations, is any thought being given to economics or industry? I would hope, moreover, that the two foreign companies involved will think for a moment: When you sell your aircraft to Taiwan, what sort of added value can you provide for our charming country?
Mike Lan is secretary general of the Taiwan Aerospace Industry Association.
Translated by Ethan Harkness
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