It takes time to get rid of old stereotypes. One is that China offers rock-bottom wages. “In the past our labor was a fairly obvious advantage,” Pang told the China Commercial Aircraft Forum of conference organizer Oppland. “Now that advantage is not so obvious.” SACC's labor rates have risen by at least 10% a year for the past four or five years, he adds.

A Western production engineer closely watching China's progress in aircraft manufacturing endorses the move to automation—but more as a measure to ensure quality rather than save costs. SACC finds that its customers are ceaselessly demanding higher quality. The case for automation can only become stronger as Chinese wages keep rising.

Whether through better quality or lower prices, China's state industry feels a need to face intensifying competition. Once it was a developing-country rival to manufacturers in developed countries. Now it faces increasing pressure from other developing countries—and from within China itself. Private aerospace manufacturing companies are cropping up in China. Often they can get government support, just as Avic's units do. And with private owners, management in these Chinese private businesses tends to be better (or perhaps just stricter) than at the government enterprises.

Many of the private companies are suppliers to the state industry and therefore should offer a chance to lower costs. But whether Chinese suppliers are owned privately or publicly, one thing that many of them have to learn is to stick to their knitting. SACC finds that it is forever reminding its suppliers that it needs them to specialize, resisting the temptation to make parts that could be easily sourced from elsewhere.

SACC is not satisfied with making parts to designs supplied by the customer. It has already taken a step in the direction of design and development with the Bombardier CSeries, in which it is a risk-sharing partner, and sees the strengthening of this capability as one of the keys to achieving its objective of becoming a strategic partner—presumably in the way that Fuji Heavy Industries and other Japanese companies have become routine participants in Boeing's commercial aircraft programs.

Shenyang Aircraft Co. is administratively part of Avic Aircraft, the group specialist in large airplanes, as distinct from general aircraft or fighters. Shenyang Aircraft is part of Avic Aviation Techniques, the group's combat aircraft division. A similar commercial unit was split from the other Avic fighter plant at Chengdu.