It is another instance of China’s “forward policy of taking-over foreign technology through outright purchase” which appears to have foxed Europe. This strategy of takeover is aimed at reducing the technology-advantage of the West, irrespective of its power, location, position. Indeed, China is moving too fast for the West to grasp the gravity of the scene, as it is affecting a major breakthrough in the technology market thereof through outright purchase. The Chinese action has come full circle after the sanctions imposed by the West in the aftermath of the 1989 Tiananmen massacre. These sanctions had debarred China from having any access, whatsoever, to high-tech thereof. The cold-blooded annihilation of thousands of innocent, unarmed demonstrators (though all Chinese) had alarmed the world. If butchery, through the main battle tank and armoured personnel carrier could be so ruthless and savage on the streets of one’s own capital city, how good, bad, ugly, better or worse would it be for foreigners?
Western sanctions on China’s quest for high tech could not be effective, however, simply because everyone in the West wanted a good price for high-tech from rich customers who are prepared to pay for it. And China today is a high-valued customer, it ultimately managed to break through the sanction-barrier to counter-penetrate deep into the European heartland to buy ~ the price here is no consideration ~ Austria’s best known, and biggest, aircraft company ~ “Diamond Aircraft Industries GmbH”. What is notable is that although Diamond does not manufacture either any multi-role fighter, transport or helicopter, yet it is “an important nursery of research and development” for high-tech flying machines. Being a futuristic and sophisticated aviation-technology company in heartland Europe, it is capable and competent enough to determine or even change, tomorrow’s aviation-technology scenario.
Thus, on 22 December 2017, China’s Wanfeng Aviation announced the world its acquisition of Austria’s Diamond Aircraft. Diamond is Austria’s main aviation company as it hardly has any other aircraft unit to show. The three other Austrian companies like FD-Composites, Scale Wings and Trixy Aviation hardly contribute anything to Vienna’s aviation industry. For Austria, Diamond gone means it’s aviation gone. Gone to whom? China!
The best news for China, however, is that both the top positions (of Chairman and CEO) of Diamond will henceforth be held by Chinese, with the third slot of Adviser going to Austria. Truly a globalised industrial scenario where the reversal of role sees the European company, along with its two top slots, being surrendered to China only because the West does not have the cash to invest in research and development in its technology. The Orient is flush with money to take care of Occident technology and thus move forward. Understandably, Wanfeng’s announcement to “continue to invest in research and development efforts in the company’s Austrian base” was not lost on anyone. Truly a win-win scenario for the East and financially an exasperating prospect for the West, which can no longer refuse or deny the financial offer of the East.
China’s thoughts and actions, therefore, are spot on. It is the research and development which will tomorrow take it to the top. China has started with the basics. Instead of going in for purchase/import of high-tech (fifth or sixth generation) multi-role fighter, strategic bomber or mega transport aircraft, its Diamond target will fetch a “number of manned, optionally manned, and unmanned surveillance platforms”. Henceforth, Austria’s readymade range of light aircraft will be at the disposal of technicians, engineers and scientists of China. Though primarily single and twin-engine turboprop craft, and essentially used for light commercial transport, it has also been modified for use in “intelligence, surveillance and reconnaissance roles”.
Moreover, the “low cost” and “payload flexibility” aircraft give the new Chinese owners of Diamond company the option to experiment and conduct changes in accordance with the market situation. After all, the Austrian aircraft has already been adopted by, and are in use with, “government agencies and air forces in countries such as Ghana (Africa), Mexico, Thailand and Ukraine. What does it mean? China has a readymade world market (in four continents) available at its disposal to its newly acquired product, and that it does not have to spend much to seek overseas customers, to begin with. This is called “on-ground head-start” with “tailwind to the airborne craft”. Austria aside, Wanfeng had almost a year ago acquired a 60 per cent stake in Diamond’s Canadian subsidiary ~ Diamond Canada. The matter is simple. China’s aviation research and development now physically spans across four continents of Africa, North America, Europe and Asia’s mainland China, thereby making it (perhaps) the sole Asian multinational aviation company.
An important point calls for reflection. How did the Sino-Austrian aviation scene grow? It began 1981 in Friesach, Carinthia, Austria as Hoffman Flugzeugbau GmbH. However, it “re-formed in 1984” after being hit by bankruptcy. Later, it developed relations with the established British engine company and Mercedes Benz Technology of Germany and other partners.
China, while closely monitoring the world aviation scenario, struck in April 2005, when Diamond announced the imminent establishment of a Chinese joint-venture ~ Shandong Bin Ao Aircraft Industries Company Limited plant at Binzhou Dagao Hi-Tec Development Zone, Shandong Province on 8 December 2006. Interestingly, since Russia was one of the customers of the original Austrian company it automatically follows that Moscow now is China’s customer too. At one level, the West is openly wary of Russia and China in matters of high-tech; and at another (ground) level, the same high-tech of aviation easily reaches Moscow and Beijing owing to the paucity of cash and bankruptcy in the West.
The Indian aviation industry, both military and civil, can draw a lesson. The bottom line is that no country, however friendly it may pretend to be, will ever give its latest and best technology to India unless its own self-interest is taken care of. The only exceptional situation could arise out of bankruptcy or prospective closure of a factory, owing to lack of customers, thus resulting in unemployment and an adverse political fallout.
China has taken full advantage of the downturn of the West’s post-Cold War scenario where some legendary companies either closed shop or were subsumed through “merger and acquisition”. India somehow could not keep pace with the fast-changing world aviation industry. Instead of waiting for manufacturers to come to India with transfer-of-technology, should we not go to the foreign manufacturer in his own country, as was being done by an Indian company for buying, owning and manufacturing high tech Jaguar-Land Rover automobile. Is it impossible? Although China comparatively may be flushed with cash, Indian enterprise surely could also be second to none. After all, technology is a matter of research, development and analysis. Should India start with “Made by India” on foreign soil? Followed by “Made in India”?
The writer is an alumnus, National Defence College, and Life Member, Aeronautical Society of India. Views are personal