China's COMAC soars, helped by state-backed funding

China and Japan both officially kicked off their passenger jet projects in 2008. So why, 15 years and millions of dollars later, is only one of them in the air? The launch in May of scheduled commercial passenger services by the C919 passenger jet was a milestone for its developer, Commercial Aircraft Corporation of China (COMAC), in its bid to challenge the long-standing global duopoly of American and European manufacturers Boeing and Airbus. Japan's Mitsubishi Heavy Industry, meanwhile, abandoned its project to develop a homegrown passenger jet early this year after numerous delays and spiraling costs. With generous state support and a large domestic market to sell into, the C919 had at least two vital advantages that its Japanese counterpart lacked. COMAC is a product of China's national drive for technological self-reliance. It was officially approved as a "significantly special" project by the central government in February 2007 and has received unflagging support from the country's top leadership since its establishment the following year. Last September, on the eve of China's National Day celebration, President Xi Jinping invited members of the C919 project to Beijing, where he lavished praise on the endeavor, saying the new plane "carries the will of the state, the dream of the nation and the hope of the people," according to state news agency Xinhua. Further underscoring its importance, COMAC was designated one of China's "central enterprises," a group of fewer than a hundred state-owned conglomerates directly under the control of the central government. The State-owned Assets Supervision and Administration Commission, or SASAC, owns about half COMAC's shares, with the rest held by eight other state-owned enterprises. There is no private let alone foreign capital involved. All shareholders but one, moreover, are either a central enterprise or a close affiliate of one. The lone exception is Shanghai Guosheng Group, a key investment arm of the city government of Shanghai, where COMAC is headquartered. Central enterprises, according to SASAC, "shoulder special responsibilities in the process of socioeconomic development of the nation." The heads of these companies have a status equivalent to that of government cabinet members within the Communist Party hierarchy.<br/>