VZCZCXYZ0000
RR RUEHWEB

DE RUEHGZ #0711/01 3430712
ZNR UUUUU ZZH
R 080712Z DEC 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0048
INFO RUEHGZ/CHINA POSTS COLLECTIVE 0013
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0011
RUEAIIA/CIA WASHDC 0013
RUEKJCS/DIA WASHDC 0013
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC 0001

UNCLAS GUANGZHOU 000711 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAIR ETRD EINV ECON PGOV CH HK TW
SUBJECT: CHINESE CIVIL AVIATION: PLANNING FOR THE FUTURE IN SOUTH 
CHINA 
 
¶1. (U) Summary:  An early-November agreement on direct charter 
flights between Taiwan and mainland China will have a negative 
effect on the number of passengers transiting Macau, according to 
aviation experts gathered for Zhuhai's biannual Airshow China at the 
2008 Guangdong-Hong Kong-Macau-Taiwan (GHMT) Aviation Industries 
Forum on civil aviation development.  The ability of Taiwan's 
tourism infrastructure to absorb increasing numbers of mainland 
tourists remains a concern to aviation policy experts.  Improving 
access to air travel in China's north, center and west will require 
new airports and better coordination between regionally co-located 
airports. Tight military control and a dearth of pilots continue to 
constrain Chinese civil aviation, according to an industry 
representative.  End summary. 
 
Cross-Straits Agreement Important, but not Satisfactory 
--------------------------------------------- ---------- 
 
¶2. (U) The November 4 agreement to permit direct charter flights 
between Taiwan and the Mainland was "important, but not 
satisfactory," according to Chinese Aviation Industries Education 
Foundation Chairman Chang Kuocheng, who said there remained much 
work to be done.  At the early November forum in Zhuhai, he said 
improved communication among cross-Strait organizations was an 
important factor leading to the agreement.  However, Chang commented 
that Taiwan's tourism infrastructure -- which, he said, is not as 
developed as the island's overall economy, a theme we have heard 
repeatedly in south China, from real estate magnets as well as 
travel experts -- was a constraint that needed to be addressed if 
Taiwan were to take advantage of increased numbers of tourists from 
the mainland.  As one example, Chang said that Taoyuan Airport 
(note: formerly Chiang Kai Shek International Airport) was "every 
[airline's] favorite in Taiwan," claiming that none of the island's 
other airports was a viable alternative from a logistics and 
infrastructure perspective. 
 
¶3. (U) Direct flights could potentially have a dire effect on 
Macau's airport, according to Hong Kong-Zhuhai Airport Management 
Company President Cheng Weiman.  Cheng said that, even before the 
November 4 agreement, the number of passengers using Macau to 
transit between Taiwan and the Mainland had fallen from 80 percent 
of passenger volume to 39 percent, without any significant increase 
in other traffic. 
 
General Aviation Lags Behind 
---------------------------- 
 
¶4. (U) China's civil aviation development is uneven and 
insufficient, according to Civil Aviation Administration of China 
(CAAC) Vice Minister Wang Changshun.  Wang said that plans to 
increase the number of China's airports to 240 by 2020 would improve 
service to the country's west, center and north.  Under the planned 
expansion, up to 80 percent of the population -- "including those 
living in rural and poor areas" -- would have access to air travel. 
(Note: Wang was clearly referring to geographic, not financial 
access; no mention was made of radically altering ticket pricing 
schemes to provide more access for the less wealthy.)  Wang added 
that better coordination on regional airport development was needed 
to equitably distribute international and domestic flights among 
airports in the same region.  (Comment: a number of China's airports 
already operate at a loss, which could result in industry resistance 
to the planned expansion.  Embassy Beijing notes that the government 
may be requiring airlines to open potentially unprofitable routes to 
remote and underserved areas as a quid pro quo for permission to 
open other, more popular and lucrative routes elsewhere.  End 
comment.) 
 
Zhuhai as a Center for General Aviation Support? 
--------------------------------------------- --- 
 
¶5. (U) A dearth of pilots and tight military control remain major 
obstacles to the development of Chinese civil aviation, according to 
China Aviation Industry Corporation President for General Aviation 
Tan Weidong.  Tan said that the country's 1000 general aviation 
pilots -- which he compared to 400,000 in the United States -- 
lacked leadership and management experience.  Nonetheless, Tan 
characterized the future of civil aviation in China as "promising," 
predicting that 2008 revenues of RMB 15 billion (about USD 2.2 
billion) would increase to RMB 60 billion by 2015 and double again 
to RMB 120 billion by 2020.  Tan said plans were in the works to 
establish a general aviation base in Zhuhai that would serve as both 
a headquarters and research center. 
 
¶6. (SBU) Lufthansa General Manager for Hong Kong, Taiwan and Macau 
Michael Suesser said he thought that Zhuhai had done a good job 
positioning itself as a center for aviation research and pilot 
training, but that any hope of becoming the Pearl River Delta's 
"third hub" -- after Guangzhou and Hong Kong -- was completely 
 
unrealistic.  Suesser noted that Lufthansa had no plans to expand 
its operations into Zhuhai for the foreseeable future. 
 
GOLDBERG