Global Economic Intersection
Advertisement
  • Home
    • 카지노사이트
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
    • 카지노사이트
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

The Red Dragon Spreads Its Wings

admin by admin
December 20, 2012
in Uncategorized
0
0
SHARES
5
VIEWS
Share on FacebookShare on Twitter

Investing Daily Article of the Week

by John Persinos, InvestingDaily.com

By wielding carefully calibrated mercantilist policies, China increasingly dominates the world economy. The country’s economic mandarins now consider aviation to be a strategic investment, important not just for economic reasons but also for national security.

In China’s 12th Five-Year Plan (2011-15), the central government stipulated that aviation must be a pillar of the country’s economic and military development. China wants to boast of a top-shelf, indigenous aviation sector that matches its emergence as a world power.

As part of this bold initiative, China is taking on the two giants that dominate worldwide aircraft manufacturing: Boeing (NYSE: BA) and Airbus SAS, a subsidiary of the huge Franco-German conglomerate European Aeronautic Defence & Space Co, or EADS (Paris: EAD).

The biggest beneficiary of China’s soaring ambitions: Fairfield, Connecticut-based multinational General Electric (NYSE: GE).

China may have codified its aerospace pretentions in its latest five-year plan, but it can’t magically create in a relatively short amount of time an industrial base capable of producing world-class engines and other sophisticated aviation gear.

GE has shown a sustained willingness to extend a hand. GE is the largest conglomerate in the US and the world’s largest manufacturer of aircraft engines; it’s also a leading maker of aeronautical components and electronics as well as a significant defense contractor. This highly diversified colossus has is fingers in many pies around the world, but it has established a particularly large and growing presence in China, with a focus on aviation.

The aviation industry’s recovery in 2013 will be driven by overseas activity, especially from China, which now stands as the world’s fastest-growing aviation market.

Experts anticipate demand for $4.5 trillion worth of passenger jets over the next two decades, with about two-thirds of new planes sold in the Asia-Pacific region. In value terms, China comprises the single biggest regional market.

China now has more than 40 new airports under construction. The combined fleet of China’s state-run airlines, currently about 2,600 aircraft, is predicted to expand to 4,500 by 2016.

According to the International Air Transport Association (IATA), the number of air passengers traveling internationally from China will grow by nearly 11 percent a year until 2014, while cargo volumes will increase annually by 12.2 percent.

In a move underscoring China’s importance to the aviation sector, American International Group in December announced it would sell almost all of International Lease Finance Corporation (ILFC), the global leader in the leasing and remarketing of advanced technology commercial jet aircraft, to a Chinese consortium for up to $4.8 billion.

This deal is the biggest to date in the aircraft-leasing realm; it would allow China to easily and cheaply tap a global network of about 200 airlines in 80 countries. With 180 planes operating in the country, China already is ILFC’s biggest market, accounting for 35 percent of its leasing revenue.

Tailwinds from the East

As GE continues to streamline its overall operations and return to its engineering and industrial roots, demand from China’s red hot and well-funded aviation sector will provide a sustained revenue boost, more than compensating for the economic vagaries and risks in North America and Europe.

GE has weathered recent economic uncertainty and is positioned to benefit from improving conditions. The company reported third-quarter 2012 revenue of $36.35 billion, an increase of $1 billion or 3 percent from the same quarter a year ago. Earnings rose 49 percent in the third quarter to $3.49 billion, or 36 cents a share, roughly in line with analysts’ expectations and up 13 percent from the same year-ago quarter.

The stock’s price-to-earnings (P/E) ratio hovers at about 17, compared to the P/E of 13 for GE’s sector of industrial goods. That’s not too high a price to pay for the company’s growth prospects, especially in China.

Third-quarter revenue at the GE Aviation division dipped 1 percent to $4.8 billion compared to the same period in 2011, but earnings increased 7 percent to $924 million.

GE Aviation’s orders dropped largely because of weakened demand from the recession-plagued euro zone, but its backlog of $98 billion in orders in the reporting month of October was 10 percent higher compared to September 2011, a clear indication that 2013 will be a banner year.

GE currently generates about $5 billion in revenue from China, for all products and services. The company has set the goal of doubling that amount by 2014, largely on demand related to aviation.

China represents the major growth area for GE Aviation. The division plans to increase the production of its energy efficient GEnx engine by 25 percent in 2013, largely to meet growing demand from Asian economies, particularly China.

The energy efficient GEnx is the quietest commercial engine GE has ever produced and it serves as the powerplant on the 787 Dreamliner, Boeing’s latest-generation passenger aircraft. The Dreamliner is a game-changing, composite-built airliner that made its debut in China in 2011.

But China is no longer content to simply lease or import aircraft. The country is on target to conduct its first test flight of a domestically developed large commercial airliner by 2014 and to begin deliveries in 2016, according to recent statements by the top brass of state-run aircraft manufacturer Commercial Aircraft Corporation of China (COMAC).

COMAC has broken ground on an aircraft assembly plant near Shanghai that’s capable of producing 20 of the large homegrown jets, code-named the C919, as well as 50 regional ARJ21 jets per year by 2016. GE is a major technology partner in this endeavor, representing a $6 billion opportunity for the company’s aviation division.

GE-made engines have the inside track to outfit these aircraft, a potentially gigantic order. GE already has won a series of significant order wins for US-made, China-bound aircraft that are powered by its engines. And GE has signed a deal to sell avionics technology to COMAC.

Despite the high barriers to entry in the aircraft original equipment manufacturer (OEM) field, the Chinese have set a goal of manufacturing large passenger jets with more than 150 seats and freighters capable of handling more than 100 tons of cargo. After delivery of its first C919 passenger jet, China will begin manufacturing even bigger jets with 250 seats.

China still hasn’t unveiled any orders for the C919 but it does have 208 orders for the ARJ21, including five firm orders from GE’s aircraft leasing arm, GE Capital Aviation Services (GECAS). All of this activity means that China will propel demand for new engine and cockpit technologies from GE.

China already is obtaining highly valuable next-generation technologies developed by GE, as part of a joint venture between GE and the state-owned Aviation Industry Corporation of China (AVIC). These technologies include flight simulators and engine manufacturing. Over the years, GE has established a significant aviation-oriented footprint in China that will be hard for its competitors to match.

Those who scoff at China’s aviation know-how shouldn’t underestimate the shrewdness of that country’s aviation decision-makers and their ability to learn from previous mistakes.

Once derided for making poor-quality “knock offs” of Western and Soviet aircraft, Chinese OEMs are making strides—with the vital assistance of GE’s highly regarded engineering prowess. Within the next few years, China is expected to boast a strong domestic base for the production of state-of-the-art aerospace manufacturing. Indeed, this leap in capability also has military ramifications that are starting to trouble Pentagon officials.

Beijing has pulled no punches about its intentions to go head-to-head with Boeing and Airbus, but it needs to avail itself of the engineering excellence of an American corporate icon—General Electric—to pull it off. This demand from the world’s second-largest economy will provide strong, consistent tailwinds for GE for many years to come.

Read More by This Author

  • Waiting for A Document Security Windfall
  • Profiting from Judgment Day

Previous Post

Gold as Central Bank Insurance

Next Post

Inflation Targeting Dead, Long Live Inflation

Related Posts

Unlocking the Future: Google's Game-Changing Move to Advertise NFT Games Starting September 15th
Business

Unlocking the Future: Google’s Game-Changing Move to Advertise NFT Games Starting September 15th

by John Wanguba
September 8, 2023
Bitcoin Is Finally Trading Perfectly Like 'Digital Gold'
Economics

Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’

by John Wanguba
August 5, 2023
Can Worldcoin Overtake Bitcoin?
Economics

Can Worldcoin Overtake Bitcoin?

by John Wanguba
August 4, 2023
Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures
Economics

Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures

by John Wanguba
August 4, 2023
Namibia Will Regulate And Not Ban Crypto With New Law
Finance

Namibia Will Regulate And Not Ban Crypto With New Law

by John Wanguba
July 25, 2023
Next Post

Inflation Targeting Dead, Long Live Inflation

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Archives

  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Unlocking the Future: Google’s Game-Changing Move to Advertise NFT Games Starting September 15th
  • Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’
  • Can Worldcoin Overtake Bitcoin?

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.