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China Investment Obstacles Persist

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Companies thinking about investing in Chinese aviation projects may face insurmountable competition from China itself. The South China Morning Post says one privately financed FBO has been put out of business and another is on hold because local airport authorities have opened or are building competing enterprises. "There is an invisible threshold for FBO or MRO on the mainland -- they have to join hands with local airport authorities," said Kelvin Wu, the vice-president for North Asia sales and market development at Cessna. "The prospect of such infrastructure is so lucrative that the airport doesn't want to pass them to other investors."

Deer Jet, one of China's first business jet enterprises, opened an FBO at Beijing's international airport in advance of the 2008 Olympics but it closed in the face of competition from an FBO opened by the airport authority. Swiss-based ExecuJet announced a joint venture with Tianjin Haite Aircraft Maintenance to build an FBO at Tianjin Binhai International Airport two years ago and now the airport is building one. On the other hand, Sydney-based Hawker Pacific partnered with the Shanghai airport authority for an FBO in Shanghai, and that joint venture has been successful.

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