Report: Airbus’ Ties to Chinese Market, Communist Party ‘Carry Outsize Risk’

Earlier, Airbus China CEO Xu Gang revealed the firm’s future endeavors with Beijing may include AI, big data and new energy. As China seeks to undergo a “civil-military” fusion while expanding its aerospace market, officials in the EU have raised questions about the potential dangers associated with maintaining traditional business engagements.

Airbus risks inadvertently aiding the surveillance capabilities and power projection of the Chinese Communist Party (CCP) through an array of partnerships–including technology sharing–as well as product and information sales, according to a new report published this month by Horizon Advisory.

The independently-funded report details the European planemaker, which recently expanded assembly line capabilities at its Tianjin plant, will be faced with “increased exposure to technology transfer” and dependency on China due to the localization of production within the country.

“Airbus’s ties to the Chinese market appear to carry outsize risk,” reads the executive summary.

The Tianjin plant is the only non-European final assembly line for Airbus A330, a popular wide-body aircraft used by both China Eastern Airlines and Air China.

The report also calls attention to the fact that five of 10 legal entities tied to Airbus are linked to Chinese state-owned and military-tied players, including the China Aviation Industry Corporation (AVIC), which has been identified by the Pentagon as a military company of the CCP.

Per the Airbus-AVIC venture, AVIC subsidiary Xian Aircraft Company (XAC) will manufacture all of the A320 wings assembled at the Tianjin plant.

XAC develops and produces the Xi'an Y-20, a large military transport aircraft used by the Chinese military.

“Dependence on Chinese suppliers, and localization of production in China, appear from company statements to be part of a deliberate Airbus decision to integrate more extensively with the Chinese system,” the report declared, citing a 2018 quote in which Airbus China CEO Xu Gang claimed it would “continue to spare no effort to support more Chinese companies to participate in Airbus’s global aviation supply chain.”

Airbus has insisted that all its ties to Chinese companies fall within full compliance with EU and international laws, including “the existing arms embargo on China.”

“As such, Airbus' industrial and technology partnerships in China are exclusively focused on civil aerospace and services,” the European planemaker told Politico in a statement. “Airbus has joint ventures in multiple locations across the country, such as with the Tianjin Free Trade Zone and [AVIC], to support production of Airbus aircraft.”

The advanced release of the report comes not long after a ‘Memorandum of Understanding’ was reached between China Mobile (Shanghai) Industrial Research Institute and the Airbus China Innovation Center (ACIC) to cooperate on the industrialization and pilot phase flight route trials for 5G Air-to-Ground broadband connectivity within China.