For the first time, Chinese buyers imported more used business jets than new ones last year.

The surge in second-hand aircraft suggests recovering confidence among Chinese buyers that could translate into stronger sales of new aircraft. It also illustrates a growing maturity in the market, and a shift in perceptions. Used aircraft can be every bit as good as new ones, cost far less, and be available right now instead of joining a long delivery line at the factory.

Operators in Greater China added 39 second-hand aircraft in 2017, compared with only 19 in 2016, according to Hong Kong business aviation consultancy Asian Sky Group. New airplane deliveries totaled 29.

That is consistent with other signs that Chinese demand, which dried up after 2013, is coming back, says Asian Sky’s managing director, Jeffrey Lowe. 

Renewed demand should show up first in arrivals of used aircraft, which are received very soon after a contract signature, rather than in deliveries from manufacturers. The same revival of confidence should be affecting demand for new aircraft, but will not show up in fleet additions for a year or two.

Greater China’s imports of 29 business jets last year was a  fall from 2016’s deliveries of 34, but not a very significant one. The combined fleet for all four locations is the best indicator of trends in mainland China, because operators there often keep their aircraft elsewhere, especially in Hong Kong. That fleet grew to 512 aircraft last year from 476, almost doubling the 4.4% growth rate of 2016.

An anti-corruption crackdown that began in 2013 dissuaded many wealthy people in mainland China who might have otherwise bought aircraft. They evidently decided that keeping a low profile was important. But a year ago Asian Sky picked up signals that “negative public image” had declined as a factor influencing decisions to buy. Also, Dassault says demand in China is stronger than at any time since 2013.

On the other hand, Lowe says a new problem has arisen for companies trying to sell business jets to mainland Chinese buyers: a tightening in restrictions on the outflow of capital. China has for decades restricted the exchange of yuan for foreign currency for capital (as distinct from trade) purposes, but there have been ways of getting around the rules. Not so many are available now, and Asian Sky is repeatedly finding that customers with plenty of yuan want to buy an aircraft but cannot get dollars.

The business aviation business of Minsheng Financial Leasing has been able to help some dollar-short intending operators by using lease arrangements, says Lowe.

Chinese buyers maintain their well established preference for large, long-range aircraft, especially those made by Gulfstream. “The G650 is absolutely crushing the competition,” says Lowe, noting that an average of almost two aircraft of that type have been arriving each month in mainland China, Hong Kong, Macau and Taiwan. Not many have been replacing G550s, he adds.

The obvious appeal of the G650 is its capability and status as the latest aircraft in its class. Gulfstream also appears to have an enduring advantage in word-of-mouth recommendations from its many established owners. A potential buyer is less likely to hear about the merits of Dassault or Bombardier aircraft, because fewer of them are in China