China's AVIC outlines development plans but challenges remain

The Aviation Industry Corporation of China (AVIC) has finalised strategies to expand during the coming years in line with Chinese government policies. AVIC said in a recent press release that its development plans are aligned with Beijing’s 14th Five Year Plan (FYP), which runs 2021–25, and the country’s medium and long-term science and technology plan (MLP), which covers 2021–35.

AVIC said its development plans – approved by the corporation’s board of directors on 20 April – include measures to support China’s development as a developer and producer of “world-class aviation equipment” and AVIC’s progression as a “world-class enterprise”.

AVIC did not elaborate but the corporation has recently prioritised the implementation of a series of reforms geared towards enhanced efficiencies and industrial optimisation; decentralisation through supply chains and partnerships with suppliers; innovation and research and development (R&D); and efforts to strengthen its capital position.

Some of these reforms – for instance, requirements to increase efficiencies and supply-chain partnerships – have been prompted by the Covid-19 pandemic.

AVIC has also recently acknowledged that it faces some challenges – in terms of its industrial practices – to improve its response to requirements outlined in China’s 14th FYP and MLP, which both prioritise “independent innovation” and the integration of advanced technologies and systems into the People’s Liberation Army (PLA).

Earlier this year, AVIC said in a press release on its website that its “first [challenge] is a lack of innovation capabilities. It is urgent to achieve higher levels of innovation in materials, technologies, and production [and] increase investment in scientific and technological innovation.”

It added, “The second is that supply-chain coordination, research and production, and cross-industry organization, are facing huge challenges, and related systems, mechanisms, and resource allocation are not yet in place.”