Optimism on Aviation Trade with China

Optimism on Aviation Trade with China

As I sit down to write, America is on the verge of a trade war with China. And as the earliest salvos of that trade war were announced, where was I headed?

China.

I spent the week, after the President announced the trade sanctions against China, in Shanghai. I was certain that it would be an unpleasant trip in which I would be forced to defend America; but I was wrong. My trip to China was valuable and uplifting and showed that there is an important aerospace future between our two nations.

Several months ago, American and China signed a new implementation procedure to their bilateral aviation safety agreement. The old agreement was a one-way street. Under the old agreement, China agreed to accept all of the aircraft products and articles that the FAA approved, so long as they were accompanied by the right documentation (our old friend, the 8130-3 tag). But America took nothing from China. Our shores were closed to the aeronautical products of China.

A U. S. manufacturer might use a Chinese manufacturer as a supplier, under the old agreement, but the certifications issued by the Civil Aviation Authority of China were useless in America.

All of that changed, late last year. The United States and China signed a new implementation procedure. A reciprocal one.

What does that mean – a reciprocal agreement? It means that whatever China accepts from the United States, the United States is willing to accept from China on a reciprocal basis. U. S. aircraft can be validated in China and Chinese aircraft can be validated in the U. S. Most importantly for the aircraft parts community, the new agreement permits Chinese PMA parts to be accepted in the United States as airworthy parts based solely on Chinese approval, with no need for any additional approval from the FAA.

My plan was to attend a conference in China at which I would discuss documentation norms for both American and European aircraft parts. By encouraging familiarity with traceability norms, I hoped to encourage Chinese air carriers and MROs to buy parts from U. S. sources.

So it was with no small amount of disappointment that I read the news of impending sanctions as the time before the conference became short. I expected to be greeted with stony stares and a dead-end sign.
But that is not who China is.

The Chinese remain interested in buying aircraft parts from the United States, including PMA parts. They recognized the political need to match the U. S. sanction-for-sanction (and in the short term, aircraft parts are likely to be subject to tariffs), but they also recognized the importance of trade between our two nations.

The Shanghai conference featured an address by Liu Yanli, a senior engineer from the China Academy of Civil Aviation Science and Technology, Civil Aviation Authority of China. If the long title is confusing, then perhaps the best way to describe him is that he is an expert from the Civil Aviation Authority of China, which is the Chinese version of the FAA.

Mr. Liu had a lot of useful information, but one comment that caused me to smile was his statement that “We should encourage use of PMA parts.” He seemed very optimistic about the prospects for both U. S. and Chinese PMA.

Mr. Liu discussed the Chinese government’s PMA regulations and policies. The Chinese government has been approving domestic PMAs since 1988, and has approved more than 800 articles, spread across over 100 applicants. While this is a small sample, compared with the over 1.3 million PMA parts approved by the FAA in the United States, it shows that this is a growing market in China.

Mr. Liu heralded the latest revision to the technical agreement between China and the U. S. – the reciprocal agreement. He lauded the fact that the U. S. has agreed to accept most Chinese PMAs.

Most PMA parts are acceptable between the U. S. and China. Mr. Liu explained that the only parts that are limited are those that are approved for aircraft for which the PMA authority (FAA or CAAC) is not the state of design of the aircraft AND the part is critical in nature. So there are no limits on acceptance of non-critical FAA-PMA parts, and there are no limits on acceptance of critical FAA-PMA parts for U. S. state of design aircraft and engines.

Mr. Liu also discussed the standards for air carrier review of PMA parts being considered for use. He explained that China is still gathering information and suggested that PMA users in China track installed PMA parts to develop reliability data.

One Chinese company noted that most FAA-PMA parts are un-serialized expendable parts. Because they are not serialized, it is difficult to identify and track them as individual parts.

The U. S. air carrier community may have already arrived at a solution that could assist, a growing number of air carriers have found that the safety and reliability record of PMA parts means that there is no need to track PMA replacement parts separately from the production certificate holder parts that they replace. In some cases, though, air carriers have been interested to track reliability data for certain parts. This is particularly true where there was a reliability issue identified for the production certificate holder’s part. Delta Airlines has identified production certificate holder parts with subpar reliability records, and replaced them with PMA parts believed to offer increased reliability. To verify these PMA parts, the airline has continued to track the full population of these parts. They have seen dramatic increases in reliability and in mean time between failures (an important safety metric). Mr. Liu offered no objection to the notion of using review of mixed populations, and comparing the mean time between failure metrics of the mixed population to that earlier data for the production certificate holder’s part. The audience suggested that a statistically steady reliability rate should indicate that the PMA parts is at least as good as the par that it replaces.

In response to questions, Mr. Liu admitted that some of the information that would be needed to assess a Chinese PMA part’s acceptability for import into the U. S. is not yet publicly available. He suggested that the government might, in the future, adopt a database like the FAA’s database in order to facilitate sharing of Chinese PMA information.

Mr. Liu explained the importance of PMA parts, in terms of lowering costs and increasing reliability. He noted that for high dollar value items that are increasing in price, PMA represents an important competitive factor. He pronounced that “PMA definitely has a bright future in engine applications” because of the pricing trends in this area. One can easily see that the Chinese government is willing to encourage development and use of PMAs – PMAs from both sides of the Pacific Ocean. And imminent tariffs on aircraft parts aren’t stopping them from laying the appropriate legal foundation for that trade.

A bright future for PMA, indeed. And the hope that this ray of sunshine might help illuminate the path forward, toward even greater aerospace trade between China and the United States.

Want to learn more? Then please register for the 2018 MARPA Conference, 2018 in Dublin, Ireland.
Want to learn more? Then please register for the 2018 MARPA Conference, 2018 in Dublin, Ireland.