At the end of 2012 as a result of the rapidly expanding
civil aviation
there were 182 commercial airports in the
People’s Republic of China
(
http://www.chinadaily.com.cn/cndy/2012-11/27/content_15961024.htm
).
Under the 2011-2015 national plan, 82 new commercial airports are to be constructed. (
http://en.wikipedia.org/wiki/Civil_aviation_in_the_People’s_Republic_of_China#cite_note-cd-1
).
Around 500 airports of all types and sizes were in operation in 2007, about 400 of which had paved
runways
and about 100 of which had runways of 3,047 m or shorter. There also were 35
heliports
in 2007, an increasingly used type of facility. With the additional airports came a proliferation of
airlines
.
These data just to give you a preliminary idea about this trend in China. However, today’s entry is not focused specifically on civil aviation, but on the interest showed by new Chinese wealthy people toward this sector, interested in particular in owning a private plane and thus the regulation which govern this particular niche market.
Private aircraft stores are springing up across China. Yet industry insiders say it does not signal maturity in the general aviation market. However a problem remains “Low-altitude airspace (under 3,000 meters) is still restricted in China and the infrastructure for take off and landing is rather poor,” an engineer surnamed Xu at Beijing Capital Helicopter Co. affirmed.
Besides policy and infrastructure shortages, buying a private aircraft is not as easy as purchasing a car. “A private aircraft buyer must have an independent licensed aviation company to manage the plane,” Xu said. If the aircraft is used for commercial flights, the Civil Aviation Administration of China has strict requirements. For noncommercial flights, pilots must submit detailed flight plans, such as time and route, and wait for the administration’s approval. This, clearly, annoy people interested in investing in this sector or willing to spend some money buying a plane. However, despite all these barriers, Beijing’s first private aircraft store still attracted some people’s attention. Three planes were ordered during the first three days the store was open. (
http://www.chinadaily.com.cn/china/2013-04/01/content_16362781.htm
).
The high costs for maintaining a private plane don’t bother rich Chinese people. Hurun Report, a Shanghai-based magazine that documents wealth, estimated China has 63,500 yuan billionaires and about a million people with assets valued at more than 10 million yuan. And the new trend among this new class of Chinese is to have a new toy they can use in substitution of other elite’s products for their enjoyment and in order, of course, to get some benefits (evidently when they need to move from one place to another) at their very convenience.
Cai Gangjun, owner of Zhejiang Rongsheng Private Jet Sales and Services, has said that China’s private aircraft market will become competitive if regulations are loosened.
In 2011, about 502,700 hours of flight were recorded in the country’s general aviation. The number is expected to soar to 2 million by 2020, according to the aviation administration.
A recent CAAC report showed at the end of 2011 there were 70 airports and 216 landing points for general aviation and the country had about 132 private jets.
Gao Yuanyang, a professor at the School of Economics and Management of the Beihang University, said in 2010 the State Council and the Central Military Commission issued a circular on extending changes to rules on the use of the country’s low-altitude airspace, a strong policy signal that low-altitude general aviation will be opened up. The low-altitude airspace management reform has been piloted in Guangdong, Hubei and Guangxi, according to the National Air Traffic Control Committee. But the timetable for opening low-level flying across the country is still unclear.
Just to conclude this entry it is necessary to stress that It will come as no surprise that rich Chinese have developed a taste these days for private jets. It is a short step, in China, from Gucci to Gulfstream:
according to a survey
of China’s richest people, released by the Hurun report at the Asian Business Aviation Conference
Asian Business Aviation Conference
in Shanghai, 13 per cent of Chinese with personal assets over Rmb100m plan to buy a corporate jet.
China had only 32 business jets registered in 2008, but that number rose to 132 by last year,
according to state-owned China Daily
. Beijing’s latest five year plan calls for developing the industry, and Cessna, one of the world’s biggest makers of business jets, recently signed agreements with Chinese partners to build business jets in Chengdu. The aviation industry is salivating at the opportunities presented by the notion of rich Chinese looking for the convenience – not to mention that sheer bragging value – of owning one’s own personal airplane.
Dear followers and readers, this entry I have to confess, was written using information from several sources, however the point is that Chinese rich people are growing in number, and their capability of expenditure also, so in my amble opinion, as I continuously stress during my presentations, if a producer of luxury good is seeking to expand its presence, China is the right place.
I am working hard to become part of this group, so feel free to contact our Law Firm and if you wish to have us helping you for your business in China, please do not forget to ask to the Managing director, if I can be part of the legal team helping you in planning your investment in China.
Cristiano Rizzi