As US export controls increasingly constrain Boeing’s operations in China, Airbus is capitalizing on the opportunity to deepen its industrial presence in the world’s second-largest aviation market. The European aerospace giant is expanding production capacity and local partnerships, while geopolitical tensions reshape global aerospace supply chains with potential implications for dual-use military technologies.
Airbus Scales Up Final Assembly and Supply Chain Integration in China
In October 2023, Airbus announced a significant expansion of its Tianjin A320 Family Final Assembly Line (FAL), aiming to double output by 2025. This move follows a long-term strategy of localization that began with the inauguration of the Tianjin FAL in 2008. The new expansion will increase annual production capacity from four to eight aircraft per month by mid-decade.
The expansion includes not only final assembly but also deeper integration into China’s aerospace supply chain. Airbus has signed multiple agreements with Chinese firms such as AVIC (Aviation Industry Corporation of China) and COMAC (Commercial Aircraft Corporation of China) for component manufacturing and systems integration.
According to Guillaume Faury, Airbus CEO, “China is not just a customer but a strategic partner.” The company estimates that approximately 10% of its global aircraft deliveries go to Chinese carriers annually. In April 2023 alone, Airbus secured orders for 160 aircraft from Chinese airlines during French President Emmanuel Macron’s visit to Beijing — a deal worth over $20 billion at list prices.
Boeing Faces Mounting Pressure from US-China Tensions
In contrast to Airbus’ deepening ties with Chinese industry, Boeing has seen its position deteriorate due to escalating US-China geopolitical frictions. In particular, Washington’s tightening export control regime — notably under the Foreign Direct Product Rule (FDPR) and Entity List restrictions — has limited Boeing’s ability to deliver commercial aircraft and components involving sensitive US-origin technology.
The US government has reportedly delayed or blocked licenses required for exporting certain aircraft models like the Boeing 737 MAX to Chinese customers. While safety approvals were restored by Chinese regulators in early 2023 after a multi-year grounding following two fatal crashes, political obstacles remain unresolved.
Moreover, concerns about dual-use technologies embedded in modern airliners — particularly avionics systems with potential military applications — have made US regulators cautious about approving large-scale exports to state-linked entities such as COMAC or AVIC subsidiaries.
COMAC C919 Gains Momentum as Strategic Competitor
The shifting dynamics between Airbus and Boeing also coincide with the rise of China’s indigenous narrow-body jet program — the COMAC C919. Designed as a domestic alternative to the A320neo and 737 MAX families, the C919 completed its first commercial flight in May 2023 with China Eastern Airlines.
The C919 still relies heavily on Western components — including LEAP-1C engines from CFM International (a Safran-GE joint venture) and avionics from Honeywell and Collins Aerospace. However, Beijing has signaled long-term ambitions to indigenize these systems through domestic R&D programs under Made in China 2025 initiatives.
If successful over time, this could erode Western aerospace firms’ market share while enabling greater autonomy for China’s civil-military aviation complex. Notably, COMAC maintains close ties with AVIC entities involved in military platforms such as the Y-20 transport aircraft and J-20 stealth fighter jets — raising concerns about technology transfer risks.
Diversification Amid Geopolitical Risk: Supply Chain Realignment
To mitigate exposure to geopolitical disruptions, both Airbus and Boeing are reassessing their global supply chains. While Airbus bets on closer integration into China’s ecosystem — including composite manufacturing facilities operated by Harbin Hafei Airbus Composite Manufacturing Centre (HMC) — it is also investing heavily in India and Southeast Asia as alternative hubs.
- In September 2023, Airbus opened a new helicopter final assembly line near Vadodara, India under partnership with Tata Advanced Systems Ltd (TASL).
- Boeing likewise expanded MRO operations near Nagpur through joint ventures with HAL (Hindustan Aeronautics Limited).
- Both OEMs are exploring Vietnam and Malaysia for avionics subassembly work given lower political risk profiles compared to mainland China.
This diversification reflects broader trends across defense-adjacent sectors where resilience against sanctions or export bans is now prioritized alongside cost efficiency.
Dual-Use Implications for Defense Industrial Strategy
The civil aviation sector increasingly intersects with national security concerns due to overlapping technologies used across commercial airliners and military platforms:
- Sensors & Avionics: Navigation systems like GNSS receivers or synthetic vision displays have both civil airliner applications and ISR utility on UAVs or bombers.
- Materials: Composite structures developed for fuel efficiency also benefit stealth characteristics on fighter jets or UCAVs.
- MRO Infrastructure: Facilities supporting widebody jets can be repurposed during conflict scenarios for strategic airlift fleets or aerial refueling tankers.
This convergence makes export controls more than an economic tool; they are now instruments of techno-strategic competition between blocs led by Washington versus Beijing-Brussels alignments. As such, decisions by firms like Airbus or Boeing carry implications beyond balance sheets — affecting alliance interoperability standards (e.g., STANAG compliance), supply chain trustworthiness assessments under NATO frameworks, and even wartime surge capacity planning.
Outlook: Strategic Autonomy Versus Market Access
The trajectory of global aerospace will hinge on how OEMs navigate competing imperatives: maintaining access to massive markets like China while safeguarding proprietary technologies amid rising techno-nationalism. For now:
- Airbus appears willing to deepen co-production ties inside China despite long-term IP risks — betting that market share outweighs strategic leakage concerns short-term.
- Boeing, constrained by Washington’s policy posture toward Beijing post-AUKUS/CHIP4 frameworks, may pivot more toward allied markets like Japan, India or NATO Europe where defense-industrial synergies are politically safer but commercially smaller than China’s scale offers.
This divergence could reshape not only who dominates future airliner sales but also who sets standards across dual-use aerospace domains critical for next-generation ISR platforms, unmanned logistics drones or even hypersonic-capable transport concepts under DARPA-like programs emerging globally.
