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Business/Finance See other Business/Finance Articles Title: How Airbus bet on China and won Want China Times Chen Juming says his "secret joy" is to sit and count Airbus aircraft as they take off, land and taxi at Beijing International Airport. His office overlooks the airport and every plane he counts is a measure of his success after 20 years in the civil aviation industry. Better known as Eric Chen, president and CEO of Airbus China, he still can't quite believe the trajectory his life has taken. "It's amazing how a liberal arts student like me succeeded in the high-tech industry of aviation. I'm still interested in history, philosophy and language, as well as the magic of aviation," Chen said. He admits that Airbus took some risks, including a series of strategic movements and the hire of him in 1994. With no aviation or business background, Chen was the first Chinese and the 32nd nationality on the company's staff. He began as an area sales director, heading a team to explore China's burgeoning civil aviation market. At the time, only 20 Airbus aircraft were in service in China. In 2015, the figure is around 1,200. This year also marks the 30th anniversary of when the first Airbus aircraft entered the Chinese market. "UNTENABLE" INVESTMENT Born in 1970s, Airbus was a latecomer in the global aviation industry, but it has been a sharp pioneer in China with a strategic market plan. As one of the pioneers of Airbus staff in China, Chen has witnessed the expansion of the Airbus in-service fleet from 6% of China's total in 1994 to 50% today for aircraft with more than 100 seats. "Airbus sensed and seized the first chance. Advancing its strategic plan in China's market, we jointly constructed comprehensive and mutually beneficial cooperation," Chen said in an exclusive interview with China's official Xinhua news agency. China's fast economic growth started to accelerate after late leader Deng Xiaoping's famous 1992 "southern tour", in which he called for bolder reforms and encouraged people to get rich. Soon after, the domestic civil aviation market took off as Beijing loosened its grip on management, and the airlines rose to the challenge of tapping the vast market. Airbus invested US$80 million in building a training center for pilots to master its modern operating systems, and it built a support center to supply airlines with aviation materials and spare parts. "Such a big investment then could not be assured with a pay-back on a strict calculation of its return on investment. It was forward looking and also risky. At last, Airbus was proved to be right," Chen said. Development has continued. In 2005, Airbus set up an engineering center in Beijing and started to discuss an assembly line in Tianjin for its popular A320 narrow-body passenger aircraft. The final assembly line in Tianjin was inaugurated in 2008 and so far has delivered some 240 aircraft. In July 2015, the company launched the Completion and Delivery Centre (CDC) in Tianjin for fitting out cabins and furnishings and painting aircraft. In two and half years, Tianjin will be the world's third center delivering both its narrow and wide-body aircraft, after its headquarters in Toulouse in France and Seattle in the United States. "On the whole, Airbus followed the right, appropriate and practical development strategy in China. It is mutually beneficial and has earned our position in Chinese market," said Chen. CROWN INDUSTRY In May 2015, Chen was awarded the Chevalier de la Legion d' Honneur, one of France's top honors, in recognition of his achievements in leading the development of Airbus in China, and the important role he has played in facilitating relations and exchanges between China and France. While Chen admits frankly that leading Airbus China has "exceeded my original ambition," he relishes the opportunity to blaze a trail and inspire others. "I expect to see more senior executives of international companies from China — not as few as today." At home he tries to teach his young son some of the science involved in "flying an egg." "Our work is to make a giant metal body shuttle around the world, carrying hundreds of people safely and comfortably," he exclaims. China's own aviation industry is now also building its own large aircraft. The first China-developed large passenger jet, the C919, from the Commercial Aircraft Corporation of China (COMAC), has entered the final assembly phase. It is expected to roll off the production line this year and to begin test flights in 2016. A more ambitious plan of a twin-aisle wide-body jet is also in the pipeline. "It is absolutely understandable for a great, populous and increasingly strong country to have the ambition and strategic plan to boost its aviation industry," he said. According to Airbus' global market forecast at the 2015 Paris Airshow, in the next 20 years (2015-2034), passenger traffic will grow annually at 4.6%, driving a need of around 32,600 new passenger and freighter aircraft of 100 seats and worth around US$5 trillion. China will become the leading country for passenger air traffic with its domestic traffic to become the world' s number one within ten years, the forecast said. As to the foreseeable future, Chen said, "The world' s aviation market is massive. The sky is vast enough to home more than the existing two aircraft manufacturers." Constant competition and newcomers have been accelerating technological advances in the global aviation industry, benefiting operators and passengers. Without Airbus to break up the US stranglehold on commercial aircraft, the emergence of mass air travel might never have happened. Chen has some unique insights into the growth of Airbus and the civil aviation industry. "The market will always have the last word," he said. "Never attempt a short-cut in the aviation industry. The Airbus story is a good example of self-reliance and the permanent pursuit of innovation and quality." The aviation industry is a "crown industry" — a manifestation of a country's industrial strength. It costs big money, but brings dividends and pulls up a long supply chain. "China has accumulated enough financial and industrial strength to drive its ambitious strategy of having its own large passenger jet. What it needs is patience in finding a suitable path of development," Chen said. Poster Comment: Deng Xiaoping... encouraged people to get rich. Contrast that with the socialist West where folks are conditioned to depend on government to meet their needs. 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