China will push its new civil aircraft company to operate commercially, even though the manufacturer will surely need some kind of subsidy to get its proposed large airliner to market. The demand for a competitive, market-driven performance from Commercial Aircraft Corp. of China (CACC) has come from the very top of the government. Premier Wen Jiabao, speaking at the inauguration of the company on May 11, made clear that the project would in no way be an engineers’ playground.

China will promote regional aviation with subsidies for small and medium airports and for airlines running short flights, helping to balance its airline sector away from big trunk routes and eastern hubs while giving some lift to sales of domestically built aircraft.

China has formally opened for business a national commercial aircraft manufacturer, which it says will offer no short-term challenge to Boeing or Airbus. Chinese aerospace executives are emphasizing the need for China to cooperate internationally in building civil aircraft, while one official of the highest level, Premier Wen Jiabao, is telling them that the business has to be run as a modern commercial enterprise, and not merely to pursue high technology.