Executive Summary
Globalization is a term used to describe the increasing interdependence and integration of national economies. Local economies could suffer if globalization has the opposite effect of helping developing countries. This paper investigates the impact of globalization on China’s aviation industry. The report covers a wide range of topics, including history, global treaties, critical forces, and their effects on stakeholders. When China was founded in 1949, there were only 36 operational airports, and many of them could not handle large planes. It was a historic moment for China when the C919, the country’s first large passenger plane, took off for the first time in May 2017. The Montreal Protocol increases the deterrent effect of disorderly conduct by allowing punishment in the country where the plane lands. International trade and integration, outsourcing and offshoring in the aviation sector, and migration and environmental degradation play a role in globalization.
Introduction
Interdependence and integration between national economies are referred to as globalization. The effects of globalization on prosperous Western economies and emerging countries can be vastly different. Both western and non-western countries can benefit or suffer from these effects. Offshoring and operations management outsourcing positively impact Western economies because of lower production costs. Conversely, outsourcing has resulted in the loss of jobs in Western economies. Globalization might signify quite different things in non-Western economies. While globalization may benefit developing nations, it may also hurt local economies (Black & Morrison, 2021). The aviation sector in China is examined in this paper to see how globalization has affected it. History, global treaties, critical forces, and their impact on diverse stakeholders are all covered in this report. The broad opposition to globalization is concerned about the effects of mass-produced items on indigenous cultures and the displacement and competition that international trade can have on poor people’s livelihoods.
History of the Chinese Aviation Industry
When Feng Ru, a Chinese living in the United States, officially established China’s first plane in 1909, the country did not establish an aviation industry until 1949. During and after World War II, China began developing its aircraft. Many newly graduated students were guided by Professor Lin Tonghua, who was in charge of the National Government Aviation Committee’s second aircraft manufacturing plant (Haikong Aircraft Plant) (Yadav & Goriet, 2019). In August 1944, a young man had designed the “Zhongyun 1” wooden dual engine light transport aircraft after over two years of hard work. Because of funding constraints, the “Zhongyun 1” was never transformed into a bomber. Professor Lin Tonghua, a lecturer at the University of California, Los Angeles, gave the “Zhongyun 1” aircraft to the China Aviation Museum.
Before 1950, the Republic of China had just three airlines: Civil Air Transport, Lufthansa, and partnerships with Pan American World Airways. Only 36 airports were operational when China was established in 1949, and most could not accommodate heavy planes. Military-run airports and airspace remained in place before China’s liberalization in the 1970s, when the nation had only one carrier, the Civil Aviation Administration of China. A strong aviation industry was a primary priority for the Chinese Communist Party and its government immediately following the establishment of China’s People’s Republic (Yadav & Goriet, 2019). It was spurred by the global situation and China’s national defense requirements that New China established the Aviation Industry Bureau under the Ministry of Heavy Industry. In 1951, Duan Zijun created the company in Shenyang to prepare for the plane-making sector.
The bureau planned to repair, imitate, reconstruct planes, and eventually create aircrafts to grow the industry. Nanchang Aircraft Industry Company constructed the Yak-18 CJ-5 trainer in 1954 and passed the State evaluation. China’s first jet fighter, the J-5 (Mig-17), was created by Shenyang Aircraft Industry Company limited in 1956, and the group was given the go-ahead to produce the fighters in batches. The first self-designed JJ-1 jet trainer flew successfully in July 1958 in Shenyang, Liaoning Province, northeast China. The basis of the People’s Republic was shaky in its early years. In addition to the exterior conflict, the Korean War brought on a tumultuous internal situation (Black & Morrison, 2021). Because of the country’s financial difficulties, the government and the Communist Party aggressively concentrated their resources and personnel on the aviation industry. Training technical professionals from the start and relying solely on domestic supplies were two of the most important strategic moves made by the government.
After more than 30 years of tireless struggle, China’s aviation sector had entered a new phase of development towards the collapse of the Soviet Union. By the turn of the century, China’s aviation sector had matured into a well-established industrial system, offering many products and services. Since China covers a wide area, it is a country with a large population. Economic modernization was the driving force behind the construction of its socialist modernization. The government and society needed to have access to civil aircraft. Civil aviation is now a priority for the government, and appropriate policy actions have been implemented. Even though military aircraft are in the works, the Chinese aviation industry should be able to supply the nation’s socialist modernization attempts and foreign exchanges with adequate civil planes soon (Black & Morrison, 2021). The inaugural flight of China’s first major passenger aircraft, the C919, occurred at the beginning of May 2017, marking a significant moment for the country. Even if China’s civil aviation industry is about to enter a new age, the road to its success has not been easy; instead, it has been tortuous.
Treaties
The 2010 ASEAN-China Air Transport Agreement
The Association of Southeast Asian Nations (ASEAN) and the People’s Republic of China signed a new Air Transport Agreement (ATA) in November 2010. To begin, the new ATA is crucial because it allows third- and fourth-freedom travel between the ASEAN member states and China without restriction. However, this agreement fails to allow ASEAN airlines to fly between another ASEAN country and China (Lee, 2018). Therefore, the ATA is not a shared aviation market arrangement in the traditional sense. As a result, the Chinese carriers have a significant edge when connecting any site in China with ASEAN. On the contrary, all ASEAN carriers should only connect through China.
Convention in Beijing
The Beijing Convention is a treaty signed in 2010 by countries that agree to prosecute terrorist acts against civil aviation. Beijing’s Diplomatic Workshop on Aviation Security closed the convention on September 10, 2010. By ratifying the agreement, countries have agreed to make it illegal to use civilian aircraft as weaponry and use hazardous materials to strike aircraft or other ground targets (Lee, 2018). Because of the convention, it is also a crime to transfer biological, chemical, or nuclear weapons. Following Turkey’s admission, the agreement went into effect in July 2018. Over the past few months, it has been endorsed by 35 states and has been accepted or approved by 26 others, making it an international agreement.
Convention for the Suppression of Unlawful Seizure of Aircraft Protocol
This Protocol was agreed upon in Beijing in 2010 and added new provisions to the Convention to prevent unlawful seizure of aircraft. The Protocol became law on January 1, 2018, amends, and expands upon the original convention; making changes and additions. Twenty-seven countries had approved the Protocol as of September 2018. A multilateral pact prohibits and punishes airplane hijacking under this agreement. The convention does not cover customs, law enforcement, and military aircraft; hence it only applies to private airplanes. The convention only applies when an aircraft departs or lands in a nation other than the one in which it is registered (Lee, 2018). An airplane hijacker should be prosecuted if no other country wants their extradition for the same offense; that is the premise laid down in the convention. Including current technological techniques of hijacking, the Protocol extends the reach of the Hague Convention.
Montreal Protocol 2014
The International Air Law Conference in Montréal, 2014, established this Protocol. Recent years have seen a rise in unruly behavior aboard commercial flights. According to the International Civil Aviation Organization (ICAO), unruly passengers put passengers and crews at risk. The Montreal Protocol, which updates the 1963 Tokyo Agreement on Offenses and some other actions committed aboard aircraft, was adopted in 2014 by ICAO members, encompassing the 28 European Union Member States. It provides a more rigorous international legal framework for dealing with rowdy passengers. Because of the Montreal Protocol 2014, countries have greater authority to penalize passengers who misbehave (Lee, 2018). It addresses a legal loophole in the Tokyo Convention 1963, which states that the state where the airplane is registered has authority over crimes perpetrated on international flights. This creates problems for authorities when dealing with rowdy passengers after arriving in a foreign country.
Physical attack, harassing, smoking, and refusal to follow flight attendant instructions are all examples of disruptive and unruly passenger behaviors. These occurrences can jeopardize flight safety, create severe delays and technical disruption, and significantly affect passengers’ and crew members’ travel, work experiences, and workplace environments. By allowing punishment in the country where the airplane lands, the Montreal Protocol increases the deterrent effect against disorderly conduct (Yadav & Goriet, 2019). In addition, the Protocol will strengthen global aviation security measures by explicitly extending statutory standing and safeguards to in-flight security agents. At the end of 2018, there were 133 parties to the agreement. More than 130 of the world’s 191 ICAO States Parties and the European Union are included.
Critical Forces
Trade and integration, technology, offshoring and outsourcing, transportation, migration, and environmental degradation are a few of the major forces driving aviation sector globalization within countries.
Technology
Rapid technological advancements have fueled globalization. Since the advent of technology and telecommunications, the concept of a physical location has lost much of its significance. People in New York and Shanghai can book a plane ticket and work together on the Internet simultaneously. This has been possible because of the widespread Internet usage in the late twentieth century (Xu, McGrory, Wang, & Wu, 2021). Cultural barriers have been decreased because of the Internet. Hainan Airlines’ services may be appreciated by a traveler in Morocco who has regular access to China. When it comes to learning about China’s culture, such a person has access to adequate information and exposure.
Trade and Integration
Because of trade, an economy’s resources are put to better use. A country can choose to produce exclusively item A and import B, which is less effective at manufacturing thanks to its comparative advantage in A. Companies use airlines constantly to obtain commodities and raw materials overseas, which leads to more efficiency and faster gains (Yadav & Goriet, 2019). In this regard, the global economy benefits from trade as well.
Offshoring and Outsourcing
Outsourcing is contracting out non-core services to a third-party company, whereas offshoring is the practice of moving corporate processes to another country. As a direct effect of globalization, emerging countries provide lower-cost options for aviation companies; therefore, they prefer to migrate (Xu et al., 2021). This is a key source of job creation for various countries outside of Western Europe.
Migration
People migrate to urban areas in droves because of more accessible jobs attributable to globalization and improved transportation options. Cities like New York, Shanghai, and London have become overcrowded and expensive. Because of the globalization of the aviation business, more people can migrate (Yadav & Goriet, 2019). People in the local area feel that outsiders are taking their jobs and working for lower wages, resulting in the sense of dissatisfaction.
Transportation
The movement of products and services is an essential part of globalization. There is no use in globalization if there is no efficient mechanism to convey commodities and services from production to consumption (Xu et al., 2021). Because of cheap labor, lax work rules, and environmental laws, many clothing firms in the United States outsource their manufacturing to China or emerging South-Asian states like Bangladesh and Sri Lanka. Since the commodities are easily moved back to the United States for consumption, then this is a viable option.
Environmental Pollution
Information, people, air travel, and technology have all contributed to an increase in pollution on a worldwide scale. The ecosystem of China and South Asia could be impacted by an oil leak in the Indian Ocean. Developed economies export their garbage and industrial by-products to be dumped in developing countries (Xu et al., 2021). Moreover, aircraft engines create fumes, noise, and particles because of the combustion of fossil fuels, which raises environmental issues.
Impact on Different Stakeholders
Different stakeholders, such as the following, are influenced by the factors affecting aviation in-country globalization:
Domestic Companies
As a widespread criticism of globalization, the loss of local businesses is cited as one of the main objections. For domestic companies, globalization only enhances competition, which results in the best-fitting enterprises surviving (Lee, 2018). It is impossible to make a profit unless one is running an efficient firm.
Workers
Globalization has the potential to benefit workers in emerging economies because of greater employment opportunities and a competitive advantage in the manufacturing of labor-intensive items. Because of this, workers may be pushed to relocate to nations like China, resulting in worse living conditions (Xu et al., 2021). In addition, people may lose their jobs when the production system becomes more capital-extensive because of globalization. Workers’ collective bargaining strength is also weakened because of globalization, resulting in lower living conditions.
Farmers
Many small-scale farmers are negatively affected by globalization. It is common for small-scale farmers to rely on labor-intensive farming practices. Compared to international enterprises, they lack access to funding, superior farming technologies, transportation, and warehousing facilities. Consequently, they cannot compete effectively worldwide and continue to operate (Yadav & Goriet, 2019). Relocation increases the likelihood of decreased living standards for most small-scale farmers.
Indigenous Cultures
Globalization is a bother for indigenous people and their cultures. Because of high production volumes, globally mass-manufactured items are cost-effective, while locally created and typically handcrafted goods face stiff competition. Commodities, funds, capital, and information are all moving more freely across borders because of the economic phenomena of globalization; a state of integration has erupted (Lee, 2018). There are many advantages to global integration, but it also comes with several disadvantages. Attributable to integration, the gap between rich and poor will widen, and the power structure will shift.
Persecution of indigenous populations can rise because of social, cultural, and economic integration. Sometimes only a few or no indigenous people who often reside near industrial operations are included in talks between the authorities and firms or international organizations and investor countries (Xu et al., 2021). Attributable to globalization investors, major corporations, and super-rich people can acquire land overseas. This means that investor interests dictate land usage. Consequently, the government favors the welfare of investors, many of which marginalize those of indigenous people. With an increasingly globalized society, indigenous people adapt and even embrace the cultures of dominant communities to maintain their existence.
Different Demographic Groups
Different demographic groupings may be affected by globalization in different ways. A clothing factory owned and operated by a local firm may, on one side, create jobs for low-skilled or semi-skilled people, but it may also put local craftsmen out of operation because of the competition from multinational corporations.
Conclusion
Mass-produced goods hurt indigenous cultures and poor people’s livelihoods, causing broad opposition to globalization. China’s civil aviation industry is entering a new era, but the road to success has not been easy; instead, it has been convoluted. Terrorist acts against civil aviation are prosecuted under the Beijing Convention signed in 2010. Aviation in-country globalization affects a variety of stakeholders, including domestic businesses, workers, and farmers.
References
Black, J., & Morrison, A. (2021). Globalization: The strategic challenges of decoupling. Harvard Business Review. Web.
Lee, J. W. (2018). Airline subsidies: Can the law play a role in regulating them? Journal of World Trade, 52(6), 897-915.
Xu, X., McGrory, C. A., Wang, Y. G., & Wu, J. (2021). Influential factors on Chinese airlines’ profitability and forecasting methods. Journal of Air Transport Management, 91, 1-19.
Yadav, D. K., & Goriet, M. O. (2019). A study of flight operational challenges encountered by general aviation industry in China. International Journal of Sustainable Aviation, 5(3), 249-262.