WCA March 2008

The Wisconsin Project thinks otherwise. Its report, made available in advance to the New York Times , asserts that two non-military Chinese companies designated as trustworthy are, in fact, high-risk because of links to the Chinese government, the People’s Liberation Army, and other Chinese entities suspected in the past of ties to Syria and Iran. In a reprise of the Huawei situation, one of the Chinese companies, BHA Aero Composites, is owned 40% each by two American companies: the aircraft manufacturer Boeing and the aerospace materials maker Hexcel. The remaining 20% is held by the Chinese government-owned company China Aviation Industry Corp I, also known as AVIC I. US business groups that advocate greater technology- sharing with China say that the administration has been cautious enough in its new policy, particularly in choosing Chinese companies that have American partners or owners. The three other Chinese companies named in October 2007 as ‘validated end-users’ are Applied Materials China, a subsidiary of Applied Materials, a maker of semi-conductors based in California; Chinese facilities operated by National Semiconductor, another US company; and Semiconductor Manufacturing International, based in Shanghai. Among them, the five companies exempted from the licensing requirements accounted for $54 million of the $308 million in exports to China that came under those restrictions in 2006. As the Herald Tribune ’s Mr Weisman points out, the US Commerce Department tries to ease the way for American companies to export to markets overseas, and there has been a particular emphasis on selling to China. Even as congressional leaders of both parties called on the Bush administration to exercise greater vigilance toward China, the United States in 2007 was generating a trade deficit with that country estimated at nearly $300 billion. As Mr Mancuso, of the Commerce Department, observed: “China is a huge market for our commercial technology exports.” ❖ On target to become No 1 worldwide, Emirates Airlines sees the US as key It is only a matter of time, according to Sheik Ahmed bin Saeed al Maktoum, before Emirates Airlines becomes the world’s largest carrier. The chairman and chief executive of Emirates expects that to happen by the year 2015, and his projection is well founded. The airline, based in Dubai, part of the United Arab Emirates, is growing faster than any other airline. As noted by staff writer Peter Pae of the Los Angeles Times , most of the airline’s growth until recently has been along routes over the Atlantic and in the Middle East. But now it is setting its sights on the US, particularly Los Angeles. With Los Angeles service, Emirates could target the sizable Muslim community in Southern California; and drawing the Hollywood crowd would advance the ambitions of tiny but mightily ambitious Dubai to become the film-making and entertainment capital of the Middle East. (‘Emirates Eyes US to Reach Lofty Goal,’ 7 th January) Aerospace

Dubai and the American West would appear to be a good fit. United Arab Emirates, a country made up of seven emirates, is considered one of the more westernised Arab nations. And Dubai, like the US, is striving to reduce its dependency on oil as a revenue source. Oil that made the Persian Gulf region rich is drying up in Dubai. When the oil is gone, the country – already a major air transportation hub – intends to have a major aerspace industry to take up the slack. Mr Pae made it plain that the US is a prominent factor in those plans. In December, Emirates Airlines threw a $2-million party in Houston for a Dubai sheik who was in Texas to celebrate the start of non-stop service between Houston and his home emirate. The event, for some 700 guests, held under the massive retractable roof of a 41,000-seat baseball stadium, was from all accounts one of the most lavish private bashes the city had had in a while. Or at least, Mr Pae wrote, ‘not perhaps since the free- spending oil boom days.’ For its part, the US is striking up a very dynamic new friendship. As summarised by Mr Pae, the brief history of Emirates Airlines is extraordinarily impressive. Started in 1985 with two leased planes, it now operates a fleet of 112 long-haul, wide-body jets. It gets a new plane – typically at a cost of $200 million to $300 million each – about every two weeks, and it has placed orders for 245 planes worth $60 billion. It is the largest buyer of the $350-million, double- decker Airbus A380, the world’s largest passenger jet. It has ordered 58 of these, nearly one-third of all orders for the plane. Emirates hopes some day to command a transpacific route, taking travellers around the globe in both directions. Now, with $15 billion in seed money, Sheikh Ahmed has started Dubai Aerospace Enterprise, whose interests include creating and acquiring companies that make, maintain, and repair aeroplane parts. The new entity has already acquired two aircraft maintenance companies in Los Angeles; and, in December, said it was ordering 200 planes for its leasing business from Boeing Co and Airbus, which would make it the world’s third- largest aircraft leasing company. Richard Aboulafia, an aviation analyst for research firm Teal Group Corp told the Times: “ They have a holistic aviation industrial policy. These are all growth areas, so if traffic doesn’t pan out they can get into aircraft repair and leasing.” Elsewhere in aerospace . . . In the most recent edition of its annual ‘Current Market Outlook,’ Boeing Co (Chicago) predicted that China will need to buy 3,400 aircraft at a cost of $340 billion over the next two decades as its air travel market grows to rival that of North America in size. The forecast was higher than earlier projections by the big aircraft maker and its European rival Airbus Industries, which put Chinese demand at 1,900 to 2,600 aircraft over two decades. Boeing expects the total Chinese fleet to nearly quadruple to 4,460 aircraft by 2026. Over the same period China’s domestic air travel market will grow nearly fivefold ‘to become slightly larger than today’s Intra- North American market,’ the report said. ❖ ❖ ❖

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Wire & Cable ASIA – March/April 2008