China’s catch 22

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Good Jet Challenger 605 B-3561 waits for its next passengers at Beijing (Photo: Alud Davies)

Some 42 of 46 Chinese business jet operators aren’t making any money.
Good Jet Challenger 605 B-3561 waits for its next passengers at Beijing (Photo: Alud Davies)

Good Jet Challenger 605 B-3561 waits for its next passengers at Beijing (Photo: Alud Davies)

At the recent Corporate Jet Investor conference in Hong Kong we learned that 42 of 46 Chinese operators aren’t making any money.

It’s not hard to see why. China’s catch 22 is that until operating conditions improve China’s operators will always struggle to make money.

That’s not to say that things aren’t changing.

The country’s air space, heavily controlled by the air force, has been undertaking small scale testing to see if it can be opened up, and the infrastructure needed to support operations is slowly being added.

But the rate of change has been frustrating to say the least, especially as economically the country is still rapidly expanding.

Second quarter GDP growth is expected to stabilise at around 7.4%, and 2014 is predicted to be the first year that outbound foreign direct investment is expected to surpass inbound investments.

So, all of the economic signals are in place, but until China manages to jump its hurdles then we’ll always be talking about the potential of the country and China’s catch 22 will always be in place.

The above originally appeared in our ‘One Minute Week’ e-mail on 11 July 2014.

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