China Real Time blog interviews James Fallows about his new book China Airborne and about the aviation industry in China:
You highlight the dramatic improvement of China’s airlines as one area of particular success. Are there specific lessons of the airline experience that could be applied elsewhere?
I argue that the experience of China’s very fast-growing airlines is a microcosm of China’s high-end commercial aspirations generally. They’re state-owned enterprises becoming increasingly exposed to commercial competition; they have been shrewd and surprisingly non-defensive in opening themselves to outside improvement and international standard-setting; and they’re buoyed by the overall continued growth of the economy. But they also have to pay their way, in what is worldwide a difficult industry. So they show ways in which “Chinese characteristics” are unusual, and also how they fit global patterns.
As I think is evident in my book, I am impressed by and respectful of the international figures — largely but not exclusively American — who have decided to devote major portions of their working lives to improving the safety, reliability, and efficiency of the Chinese air-travel system. When I asked them about the lessons they would draw, their conclusions were never startling but seemed worth underscoring. They said that they were able to make more of these “governance” breakthroughs because they never presented it in a belittling or publicly embarrassing fashion for their Chinese counterparts; because they quite evidently enjoyed China and their Chinese counterparts; and — an interesting specific point — because they were always careful to say that they were conveying ‘international’ rather than strictly ‘American’ practices and techniques.
No doubt it helped that, unlike some other arenas of foreign-Chinese interaction, this was no sort of zero-sum situation. That is, when foreigners were helping the Chinese make their air operations safer, neither side was posing a “competitive threat” to the other
Last month in Wired, Fallows wrote an essay which explained why the success of China’s aviation industry will determine the future course of the country’s economy as a whole:
Even in China there are only so many dams to be built, high-speed railroad lines to be laid, brand-new cities to be populated. China has proven that you can move people en masse from rural poverty to urban factory life in a single generation, by embracing the role of outsourcing workhouse of the world. But Chinese economists fear that this may turn into a low-wage trap that will keep the country from creating the kind of large professional, high-end entrepreneurial, and upper-middle classes that the US has long enjoyed.
Thus the Chinese determination, spelled out in its 12th Five-Year Plan to “move up the value chain.” Can it succeed? Will the next Apples, Facebooks, and Googles arise in China? How much do the current Pfizers, GEs, and Boeings have to fear?
The answer will be found in apex industries, those clusters of businesses whose vitality signals the presence of surrounding networks of high-value skills, technologies, and operational competencies. Wildlife biologists look for healthy populations of amphibians—newts, frogs—to indicate the broader health of a wetland environment. Similarly, economic analysts can look to the status of pharmaceutical industries (which reflect a strong research culture), university complexes (whose ability to draw and hold the world’s talent reflects the attractiveness of a society), and venture capital and info-tech industries (which depend on openness) to judge overall economic vitality. And in China they should be looking at aerospace.