Comment & Analysis
Links between the UK and China’s aerospace industry are constantly becoming stronger and just last year, China’s president Xi Jinping announced more than £30 billion worth of UK/China trade and investment deals completed, creating over 3,900 jobs across the UK.
At Farnborough International Airshow 2016, Dr Mark Wareing, minister counsellor and strategy director at UK Trade & Investment (UKTI), British Embassy, Beijing, explained that the UK and China’s aerospace markets working together potentially present huge, long-term opportunities for both countries. Wareing stressed that opportunities are set to grow thanks to China's recently approved 'Thirteenth Five Year Plan'. "China is estimated to be the future largest civil aviation market in the world," he added.
Many UK aerospace companies are coming to realise the major benefits of opening up their aerospace business operations in China. Wareing explained: “UK companies investing in China can help to facilitate an understanding of what China needs and how we can meet that demand through collaboration and innovation to create new technologies and solutions for the world.”
Founded by Mark Johnson in 2006, provider of green aero engine parts Sigma Components was set up to provide low cost machining capabilities for large customers that wanted to get into China but didn’t have the strength to do it.
In late 2005, a UK customer – Yumiko – promised the firm £1 million a year of business if it could get the money to set up a factory in China.
The Sigma Components now has four sites in the UK and two facilities in China. “The ability to produce parts at a lower cost in China makes us more competitive with countries such as Germany and France, for example,” said Johnson.
The company’s China and UK operations are linked closely together. “We work hand in glove and act almost as one company which is one of our key strengths," said Johnson. "We find that operations in both countries compliment and learn from each other very well and there’s a very powerful balance there too. Our Chinese operations are growing at around 50-60% a year.”
Automotive driveline technologies supplier GKN Driveline has also recently invested in China. The success of its all-wheel drive (AWD) systems has led to the expansion of the company’s production capacity in the country.
The company’s joint venture, Shanghai Driveline Systems (SDS), has added five new AWD production lines across two of its facilities in Shanghai to support growing levels of business. The investment more than doubles the company’s AWD production capacity in China, with the new lines focusing on the manufacture of power transfer units (PTU) and rear drive modules (RDM). China’s demand for AWD systems is forecast to grow from around 1.5 million vehicles in 2016 to over 2.5 million vehicles a year in 2023.
Peter Moelgg, chief executive of GKN Driveline’s AWD and eDrive division, said: “As the only AWD supplier that has designed, produced and integrated a complete AWD system in-house, GKN is the logical choice for global and local automakers in China. The expansion of our SDS joint venture’s engineering and production capabilities positions GKN for further growth as automakers introduce more advanced AWD and electric AWD (eAWD) systems in China.”
Wareing added that China is a fast growing market and a big opportunity for the UK that shouldn't be ignored. “The UK will benefit with these relations with China and other parts of the world to create successful business, high value long-term jobs and prosperity.”