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Aviation Industry Corporation of China (AVIC)
China Aviation Industry Corporation [CAIC]

Enterprise Staff
AVIC Aviation Industries of China 400,000
CHAIG Changhe Aircraft Industries (Group) 4,300
CAC Chengdu Aircraft Industry Corp. 14,000
GAIG Guizhou Aviation Industry Group 51,000
HAIG Harbin Aircraft Industry (Group) 16,000
HAIG Hongdu Aviation Industry Group 10,000
NAMC Nanchang Aircraft Manufacturing Co. 10,000
SAC Shaanxi Aircraft Company 10,000
SAIC Shanghai Aviation Industry (Group) ---
SAC Shenyang Aircraft Corporation 30,000
XAC Xian Aircraft Company 20,000
No.67 Jiaodaokou NakaJie, 
Beijing China   100712
Tel: 8610-64032115
Fax: 8610-64013648

In October 2008, the central government merged China's two large aerospace entities, AVIC I and AVIC II, creating one business unit with ten aerospace subsidiary companies. The new company, which took the name AVIC, was formed from various pieces of the former AVIC family. AVIC is a partial shareholder of COMAC. AVIC has scores of subsidiaries involved in its various business lines, and 21 of them are listed. China Aviation Industry Corporation (AVIC) is an ultra large state-owned enterprise and an investment institution, authorized and managed by the Central People's Government. It is reorganized from AVIC I and AVIC II. The Corporate is managed through 10 business units: defense, transport aircraft, aviation engine, helicopters, avionics, general aviation aircraft, aviation research and development, flight test, trade & logistics, asset management. It has nearly 200 subsidiaries (branches) and over 20 listed companies.

By 2009, AVIC reportedly had taken out loans worth USD 35 billion, but had no immediate need for the money and now had to find projects.

AVIC is one of the largest SOEs managed by the Central Government. As one of institutions with the State's authorized investment, it was restructured and established by the previous AVICI and AVICII. By the end of 2009, AVIC owned nearly 200 subsidiaries (branches) and over 20 listed companies. It had about 400,000 staff members with total assets of 393.18 billion yuan, and a operating revenue of 170.872 billion yuan in 2009. In the same year, the Group applied for the first time for the Fortune Global 500 and succeeded. It became the first aviation manufacturing enterprise and first military enterprise of China to enter the Fortune Global 500. The Group ranked 330th of the Fortune Global 500 in 2010 and ranked 426th the year before.

The development strategy of AVIC can be summarized as "two merges-into, three new core competences, five aspects for development and one trillion target". "Two merges-into" means merging into world aviation industry chain and merging into the regional economic circle. "Three new core competences" refers to creating brand value, innovating business model and building an integrated network. "Five aspects for development" involves promoting reform towards marketization, specialized reorganization, capitalized operation, international expansion and industrialization. "One trillion target" means striving to attain an economy of RMB1 trillion in 2020.

"AVIC adheres to the aim of 'Contribute to the nation with aviation industry, strengthen the military forces and enrich the people', practices the concept of 'Commitment and integrity, innovation and preeminence, and proposes the development strategy of 'Two integrations, Three innovations, Five-izations and One trillion'. We try our best to build up 'five large providers', i.e. the provider of comprehensive national strength, the provider of combating capability of the military forces, the provider of national transportation capacity, the provider of national scientific and technological strength and the provider of high-tech consumption goods.

Serving national defense is the primary responsibility of AVIC as a military enterprise. For a long time, AVIC insists in considering 'Strengthen the military force' as the core of 'Contribute to the nation with aviation industry', focuses on establishing a powerful air force for our country, continuously researches and develops advanced weaponry, meets the needs of building national defense, and makes an indelible contribution to protecting peaceful development of our country.... Providing weponary and military service to meet thedemand of armies is an obligatory duty of AVIC. The Group adheres to development, production and serviceof aviation weapons and equipment as the foundation, constantly improves the ability of independent innovation, and forms the scientific research and production system of aviation industry as well as the service security system of aviation equipment, which have relatively complete technological bases, with planes as the fist products, well supported by aero-engine, airborne system and missile weaponry system. As a result, we made positive contribution to strengthen the military forces."

AVIC develops series production fighter, fighter bomber, bomber, transport, trainer, reconnaissance aircraft, helicopter, attack aircraft, general aviation aircraft, UAV, etc. It also develops engines and missiles, such as turboprop engines, turbo-shaft engines, turbojets, turbofans, air-to-air missiles, air-to-surface missiles and ground-to-air missiles. It develops and builds brand aircraft including J-10, FBC-1, FC-1, L-15, JL-9, etc., brand engines such as Taihang, Qinling, Kunlun, etc. It provides advanced aviation-weaponry to Chinese military forces.

AVIC would uphold the principle as to "Connect the defense and commercial development and achieve synergy between the military and civil business" and vigorously develop civil and military transport with "new concept, new idea and new measure". AVIC is developing and manufacturing aircraft in series, such as turbo propeller regional aircraft of MA-60, MA-600 and MA-700, transport of Y-8 & Y-12, and Z-9 helicopter. AVIC is the major developer and supplier of ARJ21 regional aircraft and will also play a key role in the large aircraft program.

AVIC works together with the world aviation industry extensively under the principle of "just partner but not competitor". The corporate involves in international programs, such as FC-1, K8, EC120 helicopter, ERJ145. Meanwhile it actively participates in the key development programs, and develops subcontracting production businesses. It applies the advanced aviation technology into products i.e. automobile, motorcycle and engine, spare parts. It develops mechanical electrical products including gas turbines, refrigerating equipments, electronic products, environment protection equipments, new energy equipments. It also provides services such as: aircraft leasing, general aviation, air transportation, medical service, construction survey and design, civil engineering contracting and construction, real estate/property development.

AVIC is one of the leading companies in science & technology development in China. It has a high-level research network include 33 research institutes and China Aviation Establishment. It has a large team of academicians and national-class experts. A large number of research & test facilities take the lead in Asia or in the world. AVIC intranet, connecting all the domestic AVIC subsidiaries and affiliates, greatly facilitates the collaboration on information flow necessary for concurrent design and manufacturing at different locations.

AVIC commits to "contribute to the Nation with Aviation industry, strengthen the military forces and enrich the people" and carries out the philosophy of "commitment and integrity, innovative and preeminent", firmly holds the opportunity of wealth revolutionary, takes great efforts to carry out "market-oriented reform, center-of-excellence-based integration, capital operation, globalization-based development, and industrial-scale-based growth", strikes for higher, faster and stronger development, march towards the goal of becoming world-class corporation.

AVIC Development

China's aeronautics and astronautics industry was established in the 1950s. At Xi'an, Shanghai, Shenyang and Chengdu, respectively, there were four large airplane manufacturing bases, capable of producing civilian and military aircraft. On April 17, 1951, the Central Military Commission and Government Administration Council promulgated a "Resolution on Building an Aviation Industry." Subsequently China's aviation industry has developed from repair and maintenance work to modelling on existing types to building of planes of its own design. Chinese industry has designed and built upwards of 60 types of fighter planes, bombers, helicopters, transports and trainers, totalling over 10,000 planes.

In its earlier incarnations as the Third Ministry of Machine-Building and the Ministry of Aviation Industry, AVIC paid relatively little attention to combat needs or maintenance requirements. In the familiar Soviet-style pattern of the "Tyranny of the Producers," equipment was produced according to existing Ministry capabilities, rather than improving combat capabilities through increasing system sophistication. The Ministry of Aviation produced thousands of combat aircraft, most of which were obsolescent, if not obsolete, rather than attempt to develop better designs.

Aviation Industries of China (AVIC), also known as the China Aviation Industry Corporation [CAIC], was a large national industrial corporation under the direct leadership of the State Council. It owned an extensive network of development, production and related business operations, which encompassed 111 enterprises, 36 research institutes, 6 universities and colleges with a total staff of 560,000. It was responsible for developing and manufacturing military aircraft, civil aircraft, missiles, aeroengine and airborne equipment, and also had research capabilities in aerodynamics, structures, flight testing, materials, manufacturing technology, computational methods and automatic control. It established market presence in industrial equipment, instrument,gas turbine, automobile and motor cycles. AVIC established ties with over 70 countries and has exported its aircraft, engine and airborne equipment to more than 10 countries and produced parts and components of aircraft and engine for over 20 manufacturers.

The global financial crisis provided opportunities for AVIC to accelerate integration into the world aviation industry chain, and carry out the layout in globalization. In December 2009, AVIC Xi'an Aircraft Industry (Group) Co., Ltd. successfully merged with Austria Future Advanced Composites Corporation (FACC). This was not only the first overseas merger and acquisition of the Chinese aviation industry, but also the largest enterprise merger and acquisition of China in Central Europe. Furthermore, it was the first merger and acquisition of Asian aviation manufacturing industry with the European and American aviation manufacturing enterprise. This merger and acquisition provided a platform for AVIC composites industry to get access to the international civil aviation industry chain, which enhanced the division of labor of AVIC in the world civil aircraft industry. It laid a solid foundation for AVIC to accelerate the implementation of the 'Going out' strategy, and make full use of global resources, and rapidly integrate into the world aviation industry chain.

On 30 July 2015 the Financial times reported that Lin Zuoming cast the actions of Avic Heibao, a listed manufacturing subsidiary of Lin's company Avic, as part of a heroic struggle against foreign aggression. “This stock disaster was a premeditated plot, a well-prepared case of malicious short selling and part of a powerful, tumultuous economic war launched against China,” Mr Lin said in an interview with state media. “The war launched against [the Chinese stock market] is an attack on the five-starred red [Chinese national] flag.”

The term "malicious short selling" is a legally dubious term. Short selling is legal, though limited, in China, and there is no legal definition of a “malicious” form of the activity. But it appears to the basis on which the Ministry of Public Security is looking for targets on which to blame the recent stock panic.

In an editorial Lin penned for a state-run nationalist newspaper, Lin also blamed US plots for the problems in the Japanese economy in the early 1990s and for the 1997 Asian financial crisis. The two largest shareholders of AVIC Heibao Co., a publicly listed branch of state-owned aerospace manufacturer Aviation Industry Corp. of China, were under investigation for liquidating shares inappropriately. The China Securities Regulatory Commission banned senior executives and some shareholders from dumping stocks for the next six months.

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Page last modified: 04-08-2015 21:29:08 ZULU