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| #                                                                     |
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| # China: Aerospace Industry Outlook                                   |
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| Zhang Qiurong                                                         |
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| Date (06/02/2007)                                                     |
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| ID:#                                                                  |
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####### Summary

####### 

After more than ten years of double-digit annual growth, China has
emerged as the world\'s second-largest aviation market.

Driven by rapid economic growth and increased demand for air travel,
China hopes to build 42 more airports by 2010. If it does, China will
have 186 airports, including 3 national hubs, 7 regional hubs, 24 medium
hubs, 28 medium-sized airports and 124 small-sized airports. The number
of airports serviced by scheduled airlines will approach 260 by 2015.
The commercial air fleet will grow along with the number of airports, up
from from the current 960 aircraft to an estimated 1,600 by 2010 and to
3,300 by 2020.

The rapid increase in the number of airports and aircraft will require
new infrastructure, aircraft engines and parts, pilots, controllors, and
communication/navigation/surveillance syetems and equipment. Commercial
opptunities for US exporters will be significant.

The following report will discuss seven different market segments:
airline operations and aircraft, engines and parts,
Maintenance/Repair/Overhaul (MRO), airport construction, Air Traffic
Control (ATC), General Aviation (GA), and personnel training.

**Market Demand and data**

1.  **Airline operations and aircraft**

According to the Civil Aviation Administration of China (CAAC) data,
from January to November 2006, the airline industry handled a total air
traffic flow of 27.56 billion ton-km, 147 million passengers, and 3.09
million tons of cargo and mail. In each of these corresponding areas,
there was an increase of 15.4%, 15.3%, and 11.4% from the previous year.

The state-owned airlines of China National Air Holding Group, China
Eastern Air Holding Group, and China Southern Air Holding Group dominate
the trunk domestic air routes, international routes and hub airports.
Local airlines, such as Hainan Airlines, Shanghai Airlines, and Xinhua
Airlines, serve the rest of the market and focus on regional hub
flights. Local airlines operating in China are actively seeking to
increase their market share. An example is Hainan Airlines which
recently announced an agreement with Embraer for the purchase of 100
regional jets worth \$349 million.

In recent years, smaller, low-cost airline companies have emerged.
Currently, there are nine private airlines (see the list in the Engines
and Parts Prospective Buyers) with approval to operate, and more
approvals are likely in the near future.

Some foreign airlines are seeking cooperation with China's airlines; for
example, Mesa Air Group and Shenzhen Airlines jointly established a
regional airline on December 22, 2006, and Air France/ KLM is
negotiating with China Southern to create a air cargo joint-venture.

Boeing is the largest supplier of aircraft in China, with a 60% market
share. Airbus is the second largest with about 30% of the market share.
Based on China's GDP development rate, the demand for commercial
aircraft is expected to reach 2900 units within the next 20 years, with
an estimated market value of \$ 28 billion. 70% of the new aircraft will
be narrow-body,

regional jets to increase flights between the smaller, domestic airports
and larger hubs.

2.  **Engines and parts**

The follow table illustrates China's imports from the United States for
aircraft and parts in the past several years:

+---+------------+--------+--------+--------+--------+-------+-------+
| # | **Des      | **     | **     | **     | **     | **2   | 2006  |
| # | cription** | 2001** | 2002** | 2003** | 2004** | 005** |       |
| # |            |        |        |        |        |       |       |
| # |            |        |        |        |        |       |       |
|   |            |        |        |        |        |       |       |
| H |            |        |        |        |        |       |       |
| S |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+
|   | United     | 26204  | 27227  | 33882  | 44652  | 4     | 5     |
|   | States     | .28751 | .90044 | .96219 | .66092 | 8734. | 9222. |
|   |            |        |        |        |        | 97589 | 47244 |
+---+------------+--------+--------+--------+--------+-------+-------+
| 8 | Aircraft,  | 1986.  | 2331.  | 2313.  | 2520.  | 3401. | 5     |
| 8 | Spacecraft | 468689 | 660323 | 894851 | 893593 | 67475 | 634.5 |
|   |            |        |        |        |        |       | 93646 |
+---+------------+--------+--------+--------+--------+-------+-------+
|   |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+
|   | Powrd      | 1626.  | 1928.  | 1876.  | 2109.  | 2     | 4     |
| 8 | Aircr      | 455168 | 826572 | 410862 | 346111 | 864.4 | 790.8 |
| 8 | ft;Spcraft |        |        |        |        | 90751 | 55341 |
| 0 |            |        |        |        |        |       |       |
| 2 |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+
|   | Parts      | 359.   | 388    | 433.   | 410.   | 536.3 | 842.  |
| 8 |            | 031825 | .20905 | 038172 | 898847 | 74246 | 73415 |
| 8 |            |        |        |        |        |       |       |
| 0 |            |        |        |        |        |       |       |
| 3 |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+
|   | Other 88   | 0      | 14.    | 4.     | 0.     | 0.7   | 0.8   |
| 8 |            | .75319 | 399444 | 374889 | 477692 | 84707 | 83926 |
| 8 |            |        |        |        |        |       |       |
| 0 |            |        |        |        |        |       |       |
| 5 |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+
|   | B          | 0.     | 0      | 0      | 0.     | 0     | 0     |
| 8 | alln,Dirig | 012037 | .01366 |        | 009461 |       |       |
| 8 | bl;Glidr,E |        |        |        |        |       |       |
| 0 |            |        |        |        |        |       |       |
| 1 |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+
| 1 |            |        |        |        |        |       |       |
| . |            |        |        |        |        |       |       |
| S |            |        |        |        |        |       |       |
| o |            |        |        |        |        |       |       |
| u |            |        |        |        |        |       |       |
| r |            |        |        |        |        |       |       |
| c |            |        |        |        |        |       |       |
| e |            |        |        |        |        |       |       |
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| f |            |        |        |        |        |       |       |
| d |            |        |        |        |        |       |       |
| a |            |        |        |        |        |       |       |
| t |            |        |        |        |        |       |       |
| a |            |        |        |        |        |       |       |
| : |            |        |        |        |        |       |       |
| C |            |        |        |        |        |       |       |
| h |            |        |        |        |        |       |       |
| i |            |        |        |        |        |       |       |
| n |            |        |        |        |        |       |       |
| a |            |        |        |        |        |       |       |
| C |            |        |        |        |        |       |       |
| u |            |        |        |        |        |       |       |
| s |            |        |        |        |        |       |       |
| t |            |        |        |        |        |       |       |
| o |            |        |        |        |        |       |       |
| m |            |        |        |        |        |       |       |
| s |            |        |        |        |        |       |       |
| . |            |        |        |        |        |       |       |
| 2 |            |        |        |        |        |       |       |
| . |            |        |        |        |        |       |       |
| I |            |        |        |        |        |       |       |
| n |            |        |        |        |        |       |       |
| M |            |        |        |        |        |       |       |
| i |            |        |        |        |        |       |       |
| l |            |        |        |        |        |       |       |
| l |            |        |        |        |        |       |       |
| i |            |        |        |        |        |       |       |
| o |            |        |        |        |        |       |       |
| n |            |        |        |        |        |       |       |
| s |            |        |        |        |        |       |       |
| o |            |        |        |        |        |       |       |
| f |            |        |        |        |        |       |       |
| U |            |        |        |        |        |       |       |
| S |            |        |        |        |        |       |       |
| D |            |        |        |        |        |       |       |
| o |            |        |        |        |        |       |       |
| l |            |        |        |        |        |       |       |
| l |            |        |        |        |        |       |       |
| a |            |        |        |        |        |       |       |
| r |            |        |        |        |        |       |       |
| s |            |        |        |        |        |       |       |
+---+------------+--------+--------+--------+--------+-------+-------+

The main users of aircraft engines and parts are the airlines, MRO
corporations, foreign joint ventures of aircraft manufacturers, and
domestic aircraft manufacturers (see the prospective buyers and
suppliers section). AVIC I (China Aviation Aviation Corperation I) and
AVIC II (China Aviation Aviation Corperation II) are China's largest
aircraft manufacturers.

The main suppliers of engines and parts are listed under the Key
Suppliers section.

The Chinese government is in the process of manufacturing its first
regional jet. The ARJ 21 is manufactured by AVIC I Commercial Aviation
Co. Ltd. (ACAC). ACAC is a limited-liability company, which is
jointly-owned by AVIC I and fifteen other enterprises. The ARJ-21 will
be tested in 2008 and fully operational by 2009. Over half of the
airplane's parts come from the United States such as the avionics
system, which is supplied by Rockwell Collins.

Following is the statistic data on engine market share:

General Electric (GE) 6%

Rolls-Royce (RR) 9 %

\*Intenational Aero Engines (IAE) 12%

Pratt and Whitney ( PW) 13%

\*CFM 60%

Source: GE Market Report

\* IAE is a joint venture of Pratt and Whitey, Rolls-Royce, MTU, and
IHI.

\* CFM is a joint venture of General Electric and SNECMA with 50% and
50% shares.

3.  **MRO (Maintenance/Repair/Overhaul)**

The top three aircraft maintenance and engineering corporations are the
Aircraft Maintenance and Engineering Corporation (AMECO), the Guangzhou
Aircraft Maintenance Engineering Company Limited (GAMECO) and Taikoo
(Xiamen) Aircraft Engineering Co.Ltd (TEACO).

AMECO Beijing, located at Beijing Capital International Airport, is a
joint-venture between Air China Limited and Lufthansa which was
established in 1989. The total registered capital is \$187.53 million
and a joint venture agreement was signed to last 40 years. Air China
Limited holds 60% of the registered capital and Lufthansa holds the
remainer.

GAMECO, also established in 1989, is a joint venture between China
Southern Airlines Co. Ltd., South China International Aircraft
Engineering Co. Ltd. and Hutchison Aircraft Maintenance Investment Ltd.
(Hong Kong). The company specializes in aircraft and airborne component
maintenance, repair and overhaul, providing domestic and international
customers with services for Boeing B737/747/757/767/777, Airbus
A300/319/320/321/330 and EMB 145 .

TAECO is a joint-venture formed in 1993 with investment of \$262 million
on its five hangars. The two largest shareholders are HEACO Hong Kong
Aircraft Engineering Co. Ltd (with 56.55% of the shares) and Xiamen
Aviation Industry Co. Ltd. (with a 10% stake); Boeing Company, JAL and
Cathay Pacific each hold 9.09% of the shares. TAECO already has four
fully functioning hangars and a fifth will be operation at the end of
2007. As a result, TAECO has the capacity to service six wide-body and
three narrow-body aircraft simultaneously. In its short history, TAECO
has already overhauled over 600 aircraft.

TAECO has started the construction of its 6th hangar which will make it
one of the world\'s largest aircraft maintenance centers. The new hangar
will cover 50,000 square meters and cost \$67 million. Due to be in
operation by the end of 2008, it will enable TAECO to accommodate 17
aircraft at one time.

4.  **Airport construction**

The Chinese government will invest a large amount of funds to start
construction on new airports and to expand existing airports. According
to data released by CAAC, the budget for airport construction is \$18.2
billion (RMB140 billion) to build 42 civil airports in the 11th
five-year plan period (2006-2010). This will include a large new airport
in Kuming with an estimated budget of \$3 billion. The majority of the
new airports will be able to accommodate a Boeing 737.

(Please see the main airport construction projects during the 11th
five-year plan in appendix 1.)

Another highlighted airport construction project is a secondary airport
in Beijing. Currently, the location is being discussed. Upon completion
of the third terminal building project at the Beijing Capitol Airport in
2008, construction will begin on the secondary airport.

In regards to new airport construction, international companies will
have opportunities to participate in both the airport design and in the
infrastructure construction. Qualified companies may be approved to
compete with domestic companies, via the bidding process, for design,
consultation, surveillance, management, and construction of designated
civil airport projects. So far, the Beijing Capital Airport, Shanghai
Pudong Airport, Shanghai Hongqiao Airport, Shenzhen Huangtian Airport,
and Guangzhou's new Baiyun Airport were all designed by international
companies.

Ground service is another area in which foreign companies can actively
participate. Beijing Capital Airport, Guangzhou Baiyun Airport, and
Chengdu Shuangliu Airport have all established joint ventures with a
foreign partners (Singapore, Indonesia and UK) in ground services.
Shanghai Airport Ground co-operated with Cargo Warehouse and Lufthansa,
with the China Air Oil Supply Corporation (CAOSC) have established many
joint ventures with foreign companies to provide air oil supply
services.

5.  **ATC**

ATC has been a crucial barrier hindering the development of Chinese
civil aviation. Airport capacities and air-route capacities are
stretched in several high traffic areas. For example, CAAC has set the
upper-limit for the Beijing Capital Airport at 1,000 flights per day;
causing an increasing number of airlines to fight over time slots.

Insiders estimate that CAAC intends to spend RMB 9.0 billion (\$18
billion) for ATC during the 11th five-year plan (2006-2010). The main
projects include: three new Area Control Centers (ACC) in Xi'an ,
Chengdu, and Urumchi; reorganizing the current airspace structure and
reducing the total number of area control centers from 27 to 6 by 2010;
updating the existing three ACCs in Beijing, Guangzhou, and Shanghai;
building an R&D and Maintenance Center in Tianjin; and building an Air
Traffic Flow Management Center in Beijing. These improvements in the air
traffic control system will require the purchase of CNS equipment,
including the procurement of 20 ATC radars, 65 VHF remote sets and local
communication systems, 20 VOR/DME, and 30 sets of ILS. Moreover, at
least 20 ATC radars will need to updated as well.

**6. General Aviation (GA)**

General aviation is still under-developed due to controlled aerospace,
multifarious procedures for GA aircraft registration, and the lack of GA
airport and maintenance bases. Statistic shows the GA fleet in China is
comprised of only about 600 aircraft. The main GA operation includes
agriculture, forestry, fishery, medical, search & rescue, mining,
sports, scientific experimentation, pilot training, and a small portion
of business aviation. Most aircraft suppliers for these specific areas
are domestic. The aircraft suppliers for some high-level users, like
business aviation, pilot training, and flight inspection, are Beechcraft
Hawker, Cessna, Gulf-stream, Bombardier and Le Groupe Dassault.

**7. Personnel Training**

Facing the rapid development of civil aviation, China is experiencing a
dramatic shortage in pilots, mechanics, inspectors, air traffic
controllers and maintenance engineers. For example, China imports about
140 aircraft per year. The international airline industry standard is
one aircraft to twelve pilots, so China's annual need for pilots is
approximately 1,700. However, Chinese domestic pilot training capacity
is only for 1,000 pilots per year.

Another challenge facing airline industry growth in China is the
shortage of air traffic controllers. Currently, China has 3,270
controllers. It is forecasted another 3,000 additional controllers will
be needed by 2010.

Currently, seven domestic universities are authorized to train pilots,
and three domestic universities are authorized for controller training.
Also, China Southern Airlines has established a joint flight college in
Australia and Airbus has also set up simulator training center in
Beijing.

#######  Best Prospects

Driven by rapid Chinese economic development, an ever greater flow of
people will travel to and from China for business and for pleasure. Over
the next twenty years, China predicts that its air transportation
passenger volume will grow by 11% anually. China's civil aviation is in
a rapid growth stage (see figure 1 for the latest development
statistics); whereas, the U.S. civil aviation market is mature and
growing slower.

To ensure sustainability and the health of the overall aviation sector,
China must strengthen under-developed sectors of the airline industry.
According to CAAC's 11th five-year plan, favorable policies will be
drafted to stimulate regional and general aviation, focusing primarily
on regional development in the near term and general aviation in the
coming years.

Furthermore, CAAC plans to lift its control over domestic air route
operation by 2010, Presently, domestic airlines must apply for approval
to fly specific routes. In the future, the airlines would only need to
report their flight plans to CAAC. This liberalization of domestic
flights would enable small, privately-owned and joint-venture airlines
to compete with their larger counterparts by granting access to the more
profitable routes currently occupied only by the country's three biggest
airlines.

China is regarded as the fastest growing aviation market in the world
and its general aviation industry is predicted to grow at an annual
average rate of at least 10% over the next five years. The Central
Government has already indicated a strong demand for general aviation
aircrafts for areas such as Public Security, Rescue & Salvage,
Agriculture, Forestry, Firefighting, Meteorology, Surveying & Mapping,
Sports, Tourism and also for the Business Aviation industry. According
to official figures, China is estimated to require 12,000 general
aviation aircraft by 2012.

Another potential area comes from the Chinese Government announcement
that it will manufacture its own large aircraft, with a minimum of 150
seats, by 2020. The Commission of Science Technology and Industry for
National Defense has urged non-state-owned companies to participate. A
plan for a jetliner stock company has been approved. Private investment
and international cooperation are welcome.

An Airbus A320 assembly line in Tianjin is currently being constructed
and will be finished by the end of 2007. This assembly line, with an
investment of RMB 2 billion (\$263 million), is the first assembly line
of Airbus outside Europe. By 2011 the line can produce four Airbus jets
a month.

#######  

####### Prospective Buyers and Key Suppliers

####### Aircraft Prospective Buyers

The main buyers of commercial aircraft are the three state-owned airline
holding groups, and a few private airlines, which are listed in the
Engines and Parts Prospective Buyers below. Forecasts suggest that in
two years ACAC will be the main domestic supplier of regional jets.

### Engines and Parts Prospective Buyers

The main buyers of engines and parts are airlines, MRO centers and
domestic aircraft manufacturers.

### 

### Airlines

China National Air Holding Group Gold Deer Airline

China Eastern Air Holding Group Spring Airline

China Southern Air Holding Group Xiangpeng Airline

Hainan Airline Okay Airline

Shanghai Airline Yinglian Airline

Xinhua Airline Jixiang Airline

Shangdong Airline East Star Airline

Sichuan Airline United Airline

Xiamen Airline Huaxia Airline

China Cargo Airlines China Express

China Postal Airlines Great Wall Airlines

Jade Cargo

### MRO Centers

AMECO Beijing\--Aircraft Maintenance and Engineering Corporation

GAMECO\--Guangzhou Aircraft Maintenance and Engineering Corporation

TAECO -- Taikoo (Xiamen) Aircraft Engineering Co. Ltd

### 

### Main Chinese Aircraft Manufacturers

AVIC I (China Aviation Aviation Corperation I)

AVIC II ( China Aviation Aviation Corperation II)

China Civil Aircraft Development Company

Xi'an Aircraft Industry Co., Ltd.

Chengdu Aircraft company

Shanghai Aircraft Company,

Shengyang Aircraft Industry Co., Ltd.

Shijiazhuang Aircraft Industry Co., Ltd.

Hongdu Aircraft Company

**Key Suppliers of aircraft parts:**

CFM Messier Dorty (France)

PW SNECMA (France)

RR TIMKEN

IAE BF Goodrich

GE Rockwell Collins

Thales Honeywell

**ATC Prospective Buyers**

Communication/Navigation/Surveillance equipment and system prospective
buyers are ATMB of CAAC, and regional ATMBs

To expand the capacity, ATMB has planned to apply new technologies, such
as the RNP/RNAV, RVSM, ADS-B. FAA and Boeing and FAA have been
collaborating with ATMB on these programs.

**ATC Equipment and System Providers**

ACCs: Thales

The 3 existing ACCs were built by Thales, which is trying to acquire
additional contracts for the up-coming ACCs.

ATC Radars:

Thales (French)

Raytheon International, Inc. (American)

Selex System (Italian)

A new competitor called Indra (Spanish company) is making efforts to
entry this market.

VOR/DME:

AWA( Australia)

Thales(France),

Alcart.

ILS:

Normark (Europe)

Wilcox

Airsys

Alcart

Hughes is the main supplier for Satellite Communication System; Rockwell
Collins is one of the main supplier of HF ground radio station;

####### 

####### Market Entry

According to the Notification on Foreign Investment to China Civil
Aviation, the maximum foreign investment in Chinese airlines is 35%;
whereas, foreign investment in the airport or terminal operation is
capped at 49%. Foreign airlines, with operating rights in China, are
able to carry out sales via sales agents or through their own companies.
Foreign leasing companies are allowed to provide dry lease services
through cross-border supply and consumption abroad. Foreign companies
are also allowed to establish dry-lease joint ventures in China.
Generally speaking, the civil aviation industry is highly supervised by
the government due to safety considerations.

The following are necessary certifications in order to operate in
China's civil aviation sector:

For large scale commercial carriers, applicants need to follow the China
Civil Aviation Regulation (CCAR)---Part 121 to obtain a certification to
operate in China. In order for small scale commercial carriers to obtain
an operating certificate, they need to follow CCAR 135. In regards to
MRO, domestic companies of joint ventures need to follow CCAR- part145
in order to apply for the Maintenance Authorization Certificate.
Finally, for pilot training, international and domestic organizations
need to follow CCAR-Part 141 to apply for the certification of a Pilot
Training School and Part 142 to apply for Flight Training certification.

Providers of systems and equipment to Chinese civil aviation sector
related to public safety must apply for appropriate certificates from
CAAC.

####### Market Issues & Obstacles

European Union companies are the main competitors of U.S.
aircraft-related exporters. China is seeking new technology;
consequently, various manufacturers from the European Union countries
have promised technology transfers in the negotiation process.
Technology transfer can serve as an advantage in obtaining a contract
from the Chinese government.

There are several non-market obstacles to doing business in China. The
process of law/regulation-making is not as transparent as that of
developed countries. Communities, in general, and companies, more
specifically, are not given the rights to fully express their opinions
when law/regulations are being drafted.

The tax rate is a barrier for numerous imported products. For example,
the tax rate for small aircraft (used in GA) is much higher than for
commercial aircraft.

The stringent U.S. visa application process is another hindrance for US
exporters to sell products in China.

####### Trade Events

Air Freight Asia 2007 Conference & Exhibition Asia

September 3^rd^-6^th^, 2007

Asia World Expo, Hong Kong

65 6481 3880

<http://www.airfreightasia.com/>

Aerospace Laureate Award

September

Hong Kong

[www.aviationnow.com.cn/yuegui](http://www.aviationnow.com.cn/yuegui)

Beijing Aviation Expo

September 19^th^-22^nd^

Beijing China

<http://cpexhibition.com/aviation/>

2007 MRO Asia Conference & Exhibition

October 17^th^-18^th^, 2007\
Shanghai Everbright Convention & Exhibition Center, Shanghai, China

<http://www.aviationweek.com/conferences/masmain.htm>

2007 China General Aviation Forum

Date: November 7th-8th , 2007

Venue: Beijing Capital International Airport

http:// www.ChinaCivilAviation.com

The 7^th^ China International Aviation and Aerospace Exhibition

November 4-9, 2008

Zhuhai, China

<http://www.airshow.com.cn/en>

####### Resources & Contacts

The U.S.-China Aviation Cooperation Program (ACP) is committed to
working with the General Administration of Civil Aviation of China
(CAAC) and Chinese aviation experts to develop and operate safe,
efficient aviation infrastructures. This is an innovative public-private
initiative, which enhances friendship and partnership, and promotes
bilateral trade relations between the U.S. and China. Currently, there
are 4 public members and 24 corporate members. For more information,
please visit <http://www.uschinaacp.com/>

The American Chamber of Commerce in the People\'s Republic of China
(AmCham-China) represents U.S. companies and individuals doing business
in China.  AmCham-China\'s membership comprises more than 2,100
individuals from more than 900 companies. It has more than 20 industry-
and issue-specific forums and committees, offering unique services such
as the Business Visa Program, networking and informational events, and
meetings with US and Chinese officials to discuss challenges facing US
firms doing business in China.  For more information, please visit
<http://www.amcham-china.org.cn/amcham/home/index.php>

The United States-China Business Council, Inc. (USCBC) is a private,
non-profit, non-partisan, member-supported organization. It is the
principal organization of US corporations engaged in business relations
with the People\'s Republic of China. Founded in 1973 as the National
Council for US-China Trade, USCBC originally served the early efforts of
US businesses in China in the absence of formal diplomatic relations
between the two nations. With the massive growth of US-China economic
engagement since the end of the 1970s, USCBC has continued to assist
firms entering the field for the first time; however, the bulk of its
work today serves the interests and needs of US firms with
well-established commercial relationships in China. Headquartered in
Washington, DC, USCBC also serves its corporate members from field
offices in Beijing and Shanghai. For more information, please visit
<http://www.uschina.org/more.html>

USTDA\'s mission is to advance economic development and U.S. commercial
interests in developing and middle-income countries. To this end, the
agency funds various forms of technical assistance, investment analysis,
training, orientation visits and business workshops that support the
development of a modern infrastructure and a fair and open trading
environment. In carrying out its mission, USTDA gives emphasis to
economic sectors that may benefit from U.S. exports of goods and
services. For more information, please visit <http://www.tda.gov/>

Other websites helpful to US exporters:

CAAC: [http://www.caac.gov.cn](http://www.caac.gov.cn/) (in Mandarin)

CAAC news: <http://www.caacnews.com.cn/> (in Mandarin)

Air Traffic Management Bureau:
[http://www.atmb.net.cn](http://www.atmb.net.cn/)

Center of Aviation Safety Technology: http://www.castc.org.cn/

Civil aviation industry analysis report:
<http://www.ocn.com.cn/reports/2006084minyonghangkong.htm> (in Mandarin)

China Civil Aviation Report:
[http://www.UniworldChina.com](http://www.UniworldChina.com/)

**For More Information:**

The U.S. Commercial Service in Beijing, China can be contacted via
e-mail at: <Qiurong.zhang@mail.doc.gov>;

Phone: +86-10-85296655-825

Fax: +86-10-85296558/9

Our website: www.buyusa.gov/china

**The U.S. Commercial Service --- Your Global Business Partner**

With its network of offices across the United States and in more than 80
countries, the U.S. Commercial Service of the U.S. Department of
Commerce utilizes its global presence and international marketing
expertise to help U.S. companies sell their products and services
worldwide. Locate the U.S. Commercial Service trade specialist in the
U.S. nearest you by visiting <http://www.export.gov/>.

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**Appendix 1**

**Example Airport construction projects**

Airport Expansion Projects

Shengzhen Nanning Taiyuan

Chengdu Nanchang Tianjin

Xi'an Huhehaote Xining

Hangzhou Lasa Guiyang

Chongqing Baotou Wuxi

Xiamen Zhangjiaje Guiling

Qingdao Lijiang Yinchuan

Changsha Jiuzhaigou

### Example Terminal Expansion Projects 

Urumqi Shijiazhuang, Changchun,

Harbin Sanya

Zhengzhou Wenzhou

Lanzhou Jinjiang

Shengyang Yanji,

Wuhan Wuyishan

Figure 1. Chinese Major Airports Traffic Statistics of April. 2007 (Top
20 Airports)

<table>
<colgroup>
<col style="width: 17%" />
<col style="width: 7%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 8%" />
</colgroup>
<tbody>
<tr class="odd">
<td></td>
<td colspan="3">Passengers (Millions)</td>
<td colspan="3">Cargo &amp; Mail (Tons)</td>
<td colspan="3">Flights of landing and taking off</td>
</tr>
<tr class="even">
<td>Airports</td>
<td>Rank</td>
<td>Monthly Volume</td>
<td><p>Increase</p>
<p>Compared with same period of last year (%)</p></td>
<td>Rank</td>
<td>Monthly Volume</td>
<td><p>Increase</p>
<p>Compared with same period of last year (%)</p></td>
<td>Rank</td>
<td>Monthly Volume</td>
<td><p>Increase</p>
<p>Compared with same period of last year (%)</p></td>
</tr>
<tr class="odd">
<td>Beijing Capital</td>
<td>1</td>
<td>4.66</td>
<td>11.4</td>
<td>2</td>
<td>93857</td>
<td>17.0</td>
<td>1</td>
<td>34823</td>
<td>11.2</td>
</tr>
<tr class="even">
<td>Guangzhou</td>
<td>2</td>
<td>2.64</td>
<td>19.4</td>
<td>3</td>
<td>60692</td>
<td>6.8</td>
<td>2</td>
<td>22266</td>
<td>18.1</td>
</tr>
<tr class="odd">
<td>Shaihai Pudong</td>
<td>3</td>
<td>2.43</td>
<td>4.7</td>
<td>1</td>
<td>198600</td>
<td>15.2</td>
<td>3</td>
<td>20490</td>
<td>7.9</td>
</tr>
<tr class="even">
<td>Shanghai Hongqiao</td>
<td>4</td>
<td>2.00</td>
<td>16.2</td>
<td>5</td>
<td>36800</td>
<td>4.0</td>
<td>4</td>
<td>15638</td>
<td>8.1</td>
</tr>
<tr class="odd">
<td>Shenzhen</td>
<td>5</td>
<td>1.65</td>
<td>2.8</td>
<td>4</td>
<td>54329</td>
<td>15.3</td>
<td>5</td>
<td>14663</td>
<td>6.3</td>
</tr>
<tr class="even">
<td>Chengdu</td>
<td>6</td>
<td>1.50</td>
<td>13.4</td>
<td>6</td>
<td>28200</td>
<td>17.9</td>
<td>6</td>
<td>13454</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td>Kun Ming</td>
<td>7</td>
<td>1.40</td>
<td>11.1</td>
<td>7</td>
<td>20281</td>
<td>3.1</td>
<td>7</td>
<td>12539</td>
<td>11.5</td>
</tr>
<tr class="even">
<td>Hangzhou</td>
<td>8</td>
<td>1.06</td>
<td>19.3</td>
<td>9</td>
<td>18133</td>
<td>1.8</td>
<td>9</td>
<td>9492</td>
<td>15.7</td>
</tr>
<tr class="odd">
<td>Xi’an</td>
<td>9</td>
<td>0.99</td>
<td>20.2</td>
<td>15</td>
<td>9938</td>
<td>14.2</td>
<td>8</td>
<td>10022</td>
<td>22.8</td>
</tr>
<tr class="even">
<td>Chongqing</td>
<td>10</td>
<td>0.84</td>
<td>22.2</td>
<td>11</td>
<td>13564</td>
<td>19.3</td>
<td>10</td>
<td>8535</td>
<td>18.5</td>
</tr>
<tr class="odd">
<td>Xiamen</td>
<td>11</td>
<td>0.76</td>
<td>15.0</td>
<td>8</td>
<td>18701</td>
<td>9.0</td>
<td>12</td>
<td>6958</td>
<td>13.4</td>
</tr>
<tr class="even">
<td>Haikou</td>
<td>17</td>
<td>0.55</td>
<td>-3.3</td>
<td>17</td>
<td>6236</td>
<td>16.5</td>
<td>16</td>
<td>4481</td>
<td>-3,8</td>
</tr>
<tr class="odd">
<td>Changsha</td>
<td>13</td>
<td>0.69</td>
<td>24.1</td>
<td>19</td>
<td>6323</td>
<td>11.4</td>
<td>13</td>
<td>6896</td>
<td>25.1</td>
</tr>
<tr class="even">
<td>Wuhan</td>
<td>14</td>
<td>0.68</td>
<td>29.7</td>
<td>18</td>
<td>8010</td>
<td>19.2</td>
<td>11</td>
<td>7690</td>
<td>51.1</td>
</tr>
<tr class="odd">
<td>Nanjing</td>
<td>12</td>
<td>0.74</td>
<td>33.5</td>
<td>20</td>
<td>14335</td>
<td>6.9</td>
<td>14</td>
<td>6964</td>
<td>37.7</td>
</tr>
<tr class="even">
<td>Sanya</td>
<td>19</td>
<td>0.45</td>
<td>43.3</td>
<td>24</td>
<td>2922</td>
<td>35.9</td>
<td>20</td>
<td>3542</td>
<td>39.2</td>
</tr>
<tr class="odd">
<td>Qingdao</td>
<td>15</td>
<td>0.65</td>
<td>14.3</td>
<td>14</td>
<td>11056</td>
<td>12.0</td>
<td>15</td>
<td>6863</td>
<td>16.4</td>
</tr>
<tr class="even">
<td>Dalian</td>
<td>16</td>
<td>0.56</td>
<td>15.6</td>
<td>13</td>
<td>9970</td>
<td>10.5</td>
<td>18</td>
<td>4954</td>
<td>9.4</td>
</tr>
<tr class="odd">
<td>Shenyang</td>
<td>18</td>
<td>0.50</td>
<td>23.9</td>
<td>16</td>
<td>8140</td>
<td>9.6</td>
<td>19</td>
<td>4579</td>
<td>25.5</td>
</tr>
<tr class="even">
<td>Zhenzhou</td>
<td>20</td>
<td>0.45</td>
<td>29.0</td>
<td>21</td>
<td>5826</td>
<td>28.6</td>
<td>21</td>
<td>4559</td>
<td>35.3</td>
</tr>
</tbody>
</table>