Here’s something for pundits of US-China military rivalry to think about:
The US giant General Electric, one of the aviation industry’s biggest suppliers of jet engines and airplane technology, is to share its most sophisticated airplane electronics with the Aviation Industry Corporation of China (AVIC).
State-owned AVIC also supplies China's military with aircraft and weapons systems.
Avionics are the electronic and computer systems that control an airplane and determine its capabilities.
The Chinese government insists Western companies operating there should be “willing to share technology and know-how.”
However, the G.E.-AVIC avionics joint venture, analysts say, appears to be the deepest relationship yet and involves sharing the most confidential technology.
The deal will help China's manufacturers eventually compete with the US aircraft industry, which is one of America's strongest manufacturing sectors, as well as the European one.
The agreement, first drawn up in 2009, was signed last week when Chinese President Hu Jintao visited the US.
The 50-50 venture is for 50 years, a source told the NYT.
It will be the single path to market for commercial aircraft integrated avionics systems for GE and AVIC, Bloomberg and WSJ reported.
G.E. is putting in technology and start-up capital of $200 million, while Avic will initially contribute $700 million including the cost of a new research and development lab already under construction, NYT said.
To address American government security concerns, the joint venture in Shanghai will “occupy separate offices” and be equipped with computer systems that “cannot pass data” to computers in Avic’s military division, G.E. executives told the NYT.
And anyone working in the joint venture must wait two years before they can work on military projects at Avic.
Competitors in China
The first customer for the joint venture will be the Chinese company building a new airliner, the C919, meant to be China’s first entry in competition with Boeing and Airbus, the world’s two largest civil aircraft manufacturers today.
As China strives for leadership in the world’s most advanced industries, it sees commercial jetliners — planes that may someday challenge the best from Boeing and Airbus — as a top prize.
GE supplies Boeing and Airbus and may share technology used in Boeing’s new state-of-the-art 787 Dreamliner with Avic.
Interestingly, Boeing has subcontracted parts work to China for many years, and it is expanding a joint venture in Tianjin that makes parts with composite materials for several of its planes. And Airbus has built a factory that assembles A320s in the same city.
Last week China unveiled a stealth fighter, built by the Chengdu Aircraft Industry Group, with a maiden flight.
Croatia's former military chief of staff claims that J-20 (pictured right) is based on US technology acquired by Chinese spies during the 1999 Kosovo War, The Telegraph reported.
China has a history of being accused of stealing military aircraft technology, the British newspaper says.
Relations with Russia were strained last year after Moscow accused Beijing of producing near identical versions of its Sukhoi Su-27 fighter and Su-33 naval fighter, the paper said.
China had bought the Su-27, only subsequently to build the similar J-11 fighter.
The J-15 naval jet based on the Su-33 is needed for China's new aircraft carriers, the first of which may be launched later this year and which is also believed to be based on a Russian design.
See this analysis by an expert on China's defence industry: 'What The J-20 Says About China’s Defense Sector'
Photo (top) of AVIC's J-10 multirole fighter by aerospaceweb.org