It is hard to think of a product for which China is as promising a market as it is for business jets. The country is vast, and far from its main trading partners. Its huge economy is churning out new billionaires. But the number of corporate jets in China — fewer than 400 — is smaller than in lesser emerging markets like Brazil and Mexico.
And yet the mood was upbeat last week at a big industry gathering at Hongqiao airport in Shanghai. The government, long the biggest obstacle to growth, is changing its attitude. Until now overregulation has made importing jets costly, training local pilots complex and filing flight plans cumbersome. At Beijing's main airport, business jets get only two takeoff slots an hour.
Still, the government now seems ready to unleash business aviation's potential. It is promising to build 10 to 15 new airports a year. China has fewer than 400 airports for civil use today, whereas small jets can land at 18,000 fields across America. China's latest official five-year plan explicitly promotes the development of non-airline aviation and calls for reforms to improve the efficiency and allocation of airspace.
The armed forces have recently given up some big blocks of airspace they had previously reserved for training, and handed over a dozen military airfields for civil aviation. In half a dozen local trials, regulators are allowing paperwork-free flights at low altitudes. Faku, a county near Shenyang, the capital of Liaoning province, is one of these experimental zones aspiring to become a "light-air capital", with 1,000 small planes within five years.
Edward Bolen of the National Business Aviation Association, a U.S. industry group that organized last week's conference, observes that Faku's experiment points to an important difference in the way the business is developing in China. The rise of business aviation in the West started with a proliferation of small planes, typically propeller-driven, and only later moved on to bigger, jet-powered craft.
Since it first started in China in 2003, the industry has been dominated by big jets costing tens of millions of dollars; the swarm of smaller turboprops buzzing over Faku is a new phenomenon.
That suits Scott Neal of Gulfstream, a U.S. manufacturer of big business jets. His firm has sold more than 100 in China, many of them top-end models, and holds the biggest market share.
The mainland's private-jet fleet has more than doubled in the past three years, and grew by roughly a fifth last year. Bombardier, a Canadian builder of business jets, forecasts that from 2013 to 2032 Chinese customers will take delivery of more than 2,400 of them.
And NetJets, a firm partly owned by Warren Buffett's Berkshire Hathaway Inc. that offers fractional ownership of jets, is about to dip its toes into the China market.
Copyright 2013 The Economist Newspaper Limited, London. All Rights Reserved. Reprinted with permission.