Quickie Post — More Lower v-Meme Additive Aircraft Manufacture in China

Conor Prosciutto

Di Palo’s Deli, Manhattan, February 2017

An interesting piece came flying across my news feed this morning, about how Boeing is now going to ship a good hunk of Chinese delivery aircraft to a new completion center in Zhejiang Province, China.  I suspect that you’ll have to sign up in order to read this on the Aviation Week website, but the short version is that the folks in Zhejiang will be the ones putting the finishing touches on 737s and 787s for China’s rapidly growing internal market segment — in particular, Loong Airlines.

Putting the finishing touches on aircraft isn’t the same as building them from scratch.  And Airbus has been doing this for a while in its fulfillment center for the Chinese market.

Regardless, about Boeing, from the article:

“Boeing is seen as having an advantage over Airbus in securing a sale of widebody aircraft to Loong. It agreed to set up a 737 completion facility in the eastern province of Zhejiang in 2016. The plant carries out work such as cabin fitting and painting before delivering the aircraft to Chinese customers. Loong is based in Hangzhou, the capital of Zhejiang province, and is backed by the provincial government. Its aircraft orders, therefore, can be used in support of provincial economic policies. Those policies extend to building up an aeronautics industrial zone around the Boeing facility. The government wants major industry suppliers to set up there. Loong, meanwhile, hopes to establish a large aircraft maintenance facility.”

Zhejiang is an interesting province in that it deliberately fosters entrepreneurship, and has a rapidly rising wage scale.  But even with 8% growth, that wage scale is somewhere between $3K in the countryside, to $7K in urban centers.  Getting aircraft jobs matters to Zhejiang.  And that’s happening.  Aircraft orders are these myriad complex deals that negotiate everything into a package, from overflight rights to actual construction and jobs.  But the upshot is simple — geographically unbound, lower v-Meme jobs are going to flow to lower v-Meme countries/provinces.  Because those jobs can’t create the productivity to justify higher salaries.

It’s an interesting way to look at job migration.  Actual information coherence content.  Which then leads to the level of empathetic development.  Gotta love it!

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