Graham Warwick

Commercial production rising. Defense budgets falling. Economic uncertainties and regional instabilities that could affect both. That is the world the aerospace and defense industry faces entering 2013, and which is examined in detail in the pages that follow.

But if there is one theme that recurs frequently through this latest edition of Aviation Week's annual forecast issue, it is China and its growing financial, industrial, political and military influence on aerospace and defense globally.

By flying two new stealth fighter prototypes, operating an aircraft from a navy carrier for the first time (pictured) and unveiling a range of unmanned-aircraft designs over the past two years China, at least in the eyes of the public, has narrowed the U.S.'s technological lead.

In the commercial world, China continues to be a major buyer of Western airliners and a growing market for business jets. The country has also cemented its position as a leading financer of the global air transport industry through its December acquisition of U.S. lessor International Lease Finance Corp. for $4.8 billion.

But it is China's ambitions as a manufacturer that have caught the most attention. Although it is struggling to certificate the 90-seat ARJ21, Comac is pushing ahead with development of the 160-seat C919 to challenge Airbus and Boeing. Plans to buy Hawker Beechcraft out of bankruptcy collapsed in late 2012, but with its market and its money few doubt China will become a major player in business aviation through acquisitions and coproduction. Avionics and engines are next on Beijing's target list.

For the first time, Aviation Week's annual forecast issue incorporates the global military analysis of our Defense Technology Edition and detailed commercial maintenance, repair and overhaul insights of our MRO Edition, as well as Aviation Week & Space Technology's outlooks for individual industry sectors ranging from combat aircraft to communications satellites.

Also for the first time, five-year forecast data produced by Aviation Week Intelligence Network's own analysts are presented, providing projections for combat aircraft, military transports, rotorcraft and commercial aircraft deliveries for 2013-17, as well as detailed analyses of projected MRO demand.