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China National Aero-Technology Import
and Export Corporation (CATIC)
中国航空技术进出口总公司
PRESIDENT: Yang Chunshu
OTHER NAMES: China Aviation Technology Import-Export Corporation
ADDRESS: CATIC Plaza, 18 Beichen Dong St., Chaoyang District, Beijing 100101, China
WEBSITE: http://web.catic.com.cn
The CATIC Group is a subsidiary organization of the former Aviation Industries Corporation of China (AVIC) which oversees the R&D, production and sale of all military and civilian aircraft in China. The CATIC Group is not a production entity but rather sells military and civilian aircraft, engines, missiles and other airborne equipment. CATIC's $1.5 billion in annual business is evenly divided between exporting and importing and export revenue is evenly divided between the sale of military aviation equipment, civilian aviation equipment and nonmilitary equipment.
For a few years in the early 1990s, CATIC was the sole organization within AVIC which could negotiate for the import/export of AVIC products. CATIC negotiated the deals and was responsible for getting the products from the factory to the customer; CATIC also provided after-sales maintenance contracts. However, this changed with the adoption of the factory manager responsibility system because individual factories began negotiating contracts themselves and did not go not through CATIC. The factories still relied on CATIC to ship the items abroad. CATIC also faced competition from the PLA Air Force (PLAAF) which undermined CATIC’s profit making ability. The PLAAF began competing with CATIC for post-sale maintenance contracts through its Aeronautical Engineering Department (AED) which had an office in Poly Technologies and over 20 overhaul and maintenance factories.
Over the past two decades, CATIC has been responsible for the export of F-6 and F-7 light fighters, K-8/FT-7 jet trainer, F-8II fighter-bomber and A-5 ground attack aircraft. These systems have been sold to countries such as Iran, Pakistan, Myanmar, Egypt and Sri Lanka. One of CATIC’s most recent deals was the 1998 agreement with Pakistan to co-develop the FC-1/Super-7 aircraft. In addition, CATIC sells air-to-air, ship-to-ship and land-to-ship cruise missiles and related components produced in AVIC factories. Some of the specific missile systems CATIC exports include the PL-5B, PL-7, PL-9, FL-1 (CSS-N-1 Mod 2), FL-2 (CSS-NX-5), and FL-7 cruise missiles. CATIC may also have played a role in exporting Silkworm missiles to Iran which were possibly produced at the Nanchang Aircraft Factory.
In recent years AVIC and CATIC have not fared well economically due to a significant drop in the demand for their products, within and outside China. The Chinese government has preferred to buy civilian aircraft from Boeing and Airbus rather than from its domestic manufacturers. In the military realm, the PLA in 1994 concluded a deal with Russia for the purchase of 52 Sukhoi-27 aircraft and assembly kits for the aircraft, largely due to AVIC’s inability to produce a fighter with equivalent capabilities. The Su-27s assembled in Chinese factories conducted their first flight tests in early 1999, a few years after the initial deal was concluded. China has a poor record of bringing prototypes into serial production, and the delays in assembling the Su-27 aircraft is one example of endemic problems in China’s aviation industry. Interestingly, the Su-27 project merely involved assembling materials from a “kit” purchased from Russia. As for future related exports derived from the Su-27, China may have difficulties if it seeks to integrate foreign technologies into a domestic weapons system.
Given AVIC’s systemic difficulties producing military aircraft and the resulting decline in domestic orders for Chinese fighters, it is likely that CATIC will increasingly look to the international market to sell its military aircraft. For example, the main reason CATIC is co-developing the FC-1 fighter with Pakistan is because the PLA Air Force refused to buy the aircraft; co-development will help to reduce the overall research, development, testing and evaluation (RDT&E) costs of the fighter. Aircraft exports will be used to generate hard currency for the purchase of advanced production technologies which, in turn, could help modernize the production capabilities of AVIC factories as part of China’s effort to develop an indigenous capacity to produce advanced military aircraft.
Due to the difficulty in selling military aircraft, AVIC plans to expand the export of nonmilitary products, such as motorcycles, watches, television sets and refrigerators.
[Sources: Jane's Strategic Weapon Systems, various
issues; Elizabeth D. Olmo, "China's Nuclear Agenda and the Implications for
United States Foreign Policy," Naval Postgraduate School, Monterey, California,
September 1993, p. 83; Defense & Foreign Affairs Weekly, 26 February
1990, p. 3; "Israeli-China Joint Venture," Flight International, 10
April 1996; Vernon Loeb and Bill Miller, "McDonnell Douglas Indicted for
Equipment Sold to China." The Plain Dealer. 20 October 1999. p. 16A;
"Egypt buys fighters turned down by PLA," AFP,
27 March 2000; Philip Finnegan, "Chinese Trade Authority Searches For New
Military, Civilian Markets," Defense News, 27 March 2000, p. 16.]
Last Updated: 11/26/2003
This
material is produced independently for NTI by the James Martin
Center for Nonproliferation Studies at the Monterey Institute of
International Studies and does not necessarily reflect the
opinions of and has not been independently verified by NTI or
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MIIS.
