Foreign airline pilots

Job market changed

In my post on the Binzhou Flying College I mentioned China is employing many foreign airline pilots. The job market for pilots is changing and is suffering the impact of the debacle with the Boeing 737 MAX. Chinese carriers account for 20% of global fleet of grounded planes and have largely stopped hiring foreign pilots for the 737. Appetite for captains of many Airbus models remains unabated.

Commercial pilots in China

The number of Chinese licensed commercial pilots was 61,492 at the end of 2018. That’s up 54% from 2014 levels, but it’s still not enough. According to Boeing, China will need 8,090 new airplanes over the next 20 years. To fly them all, China will require another 124,000 pilots, Boeing says. That’s the equivalent of 119 new hires every week for two decades.
As a result by the end of 2016, Chinese carriers had more than 1,000 foreign airline pilots, double the number in 2010.

Good salaries

Chinese airlines that are still hiring are getting more picky to select foreign airline pilots, simulator tests are pretty strict. Chinese airlines still pay above-market wages,  paying multiple times the median salary of a commercial pilot in the United States.
It’s still possible for overseas pilots to head home with US$1 million in the bank after five years of flying in China.

Juneyao Airlines in Shanghai is offering US$299,000 a year to A320 captains aged between 30 and 53. The role demands an average of just 14 hours’ flying a week and includes 50 days of paid leave and an overseas employment allowance of US$666 a month. The pay climbs to US$311,000 – after tax – a year in the second term.

China United Airlines, a unit of China Eastern is offering US$288,000 a year to 737 captains on three-year contracts. But that’s the site’s first ad for 737 pilots in China since July. The package includes a monthly education allowance of $1,000 for children in Chinese schools.

The future

Schools as the one in Binzhou have an uphill task to satisfy demand, in view of China’s booming aviation market.



The Belgian EANDIS story revisited

Disclaimer: our consulting company works very closely with China State Grid since many years.

Belgian EANDIS stops the discussions with China State Grid

After a protracted battle, Belgian EANDIS officially announced earlier this month the discussions with China State Grid were definitively stopped.
A letter of the Belgian State Security had made waves earlier on, as it wanted to point out the possible security issues by granting shares to the Chinese state company. Others dismissed the warnings as China State Grid would not have access to “sensitive customer data”.
The negotiation had to be shelved as the 236 Flemish cities concerned could not agree on a fusion of the different city utility services, a main condition for the deal. Antwerp was one of the most opposed to the fusion.
Others, including EANDIS, said to be disappointed.
Again a sad example of political bickering in Belgium.

Opposition against a Chinese share

In the media, a lot of criticism against the deal.
Some were against a Chinese company as it was an “arm of the Chinese Communist Party”.
Others wanted the electric utility to remain Flemish and Belgian investors to join an investment that would give 4% interest returns while normal bank interests are less than 1%: “Why give all the money and benefit to the Chinese, they will take all the profits to China”.
Commented a member of the Flemish parliament (Green Party): “Do we want a Chinese or a Flemish Energy Network? Do we want to see every year 40 million euro to flow to China?”

My view

See my earlier post, in Dutch:
“Hoopla rond Eandis in Vlaanderen”

First of all, people should respect international investment deals. The Chinese company would invest 830 million euro in the Flemish network for a 14% share. Obviously a company wants to have a return on investment and repatriate it. If a foreign company invests in China, they expect the same.
So, a lame argument.

As for not inviting Belgian investors I must agree. As I mentioned earlier, since time we see good Belgian companies disappear and being bought by foreign groups, French, American, Japanese, Swiss, name it.
Belgium has shown incompetence to retain its valuable companies, through mismanagement, lack of financial support and creativity, among others. Why can’t they make the companies profitable? Look at “Belgian” beer and chocolate: how much is still in Belgian hands? Not even to mention companies in the mechanical and electronic industries. What a shame – I worked for some of those and saw how things went the wrong way.
So, why does Belgian EANDIS need to ask China for money? Why can’t Belgium solve the need for capital and new management? For sure many Belgian people would be willing to put their savings in an investment that returns annually more than 0.5% or something.

Chinese companies on a buying spree

See here an interesting article from KNACK (Belgium), 6 September 2016:

“Chinezen kopen onze bedrijven: wat zijn ze van plan?” (The Chinese are buying our companies, what is their plan?). Companies mentioned are Delta Lloyd Belgium, Volvo, Punch Power Train, APM container terminal in Zeebrugge, Deurganckdock in Antwerp, rubber producer SIAT, Wijnegem and  Waasland Shopping Center. (If you want the article, contact me)

We do see in Europe (and other countries…) a growing opposition to Chinese buying up companies and other assets, partly due to their sometimes poor approach and execution.


Actually China State Grid has been involved in transmission and distribution in electric networks in many countries, such as Brazil, The Philippines, Portugal, Australia and Italy. As far as I know no any country has had complaints of “security issues”.
It is the largest utility company in the world. It also has several factories that are state of the art, leaving most EU companies behind.

Is China State Grid to blame?

Some argue that the Chinese company did a poor PR job and did not communicate well to defend its proposal. Up to a certain extent I agree, the company is indeed weak in communication – I am also requested NOT to talk about the work we do with them… But all in all, in view of the internal bickering in Flanders, what could the Chinese do?
At first I dismissed the accusation that the company, as many others, is “managed by the Chinese Communist Party”.
Unfortunately, this objection related to SOEs (State-Owned Enterprises) is now supported by President Xi Jinping himself:
“What mixed signals on TV say about China’s on-again, off-again state firm reforms. Question of whether the party or boards should dictate business decisions is still a running issue.
Xi’s speech on the SOEs clearly stated the party would strengthen control over SOEs and exercise more oversight instead of allowing market forces to play a “decisive” role as earlier promised. At the high-level meeting Xi made it abundantly clear that the party leadership is “the root and soul” for SOEs.”

Read the full article dated 16 Oct 2016:

PPP in China: long way to go

I think I can say I have been a pioneer in Beijing trying to launch the Olympic projects under a PPP scheme (Public Private Partnership). After studying how other countries successfully used PPP, I launched the big tenders (Bird’s Nest and others) under a PPP approach. While the Prequalification was a real success we were then hit with the lawyers who said we could not follow the PPP because of the new tendering laws. So, PPP was dead, virtually, and we tried to carry out the projects in a “creative” way. Some lawyers tried to convince me “China has PPP” but our discussion lasted 1 minute only, after I asked one question; the only real PPP project ever in China was the power plant Laibin B.

Recently China officially launched a series of “PPP projects”. While I do not agree with the approach and the format is not really PPP, it seemed like a nice try.
Well, the results are not good.

“UPDATE 1-China says to further pave way for private investors in infrastructure projects”
Reuters article

So far, fewer than one-quarter of projects announced by the government as PPPs have found private investors, official data shows.
Investors had signed up for 619 of 2,531 projects with a total value of 1 trillion yuan through the end of July 2016 according to the NDRC.

Reuters also pointed out in another article that the government trying to woo private capital has been a flop. Since March 2015 the NDRC has raised more than half of its target of 3.5 trillion RMB for PPP projects for bridges, roads, schools, hospitals. But over 90% comes from SOE according to a study by North Square Blue Oak. A real embarrassment for the government as it failed to attract the right private investors and SOE have been finding ways to monopolize the funding.

See also: “China’s private infrastructure firms face unexpected competition”
Yahoo Finance article

Some statements say it all:
“The government is willing to work with government firms, but co-operation with private companies is a shambles. None of the projects make financial sense.”

My experience showed most government officials (and not only in China) do not understand at all what is PPP. Explains why many projects fail as private companies do not see an interest.
As a former long-time chair of the European Chamber’s Working Group on Public procurement I kept a watch on PPP in China.


Beijing traffic woes are getting a lot of attention

For me it all started unplanned, I had to make a speech about Beijing to the Beijing Mayor and I talked about how most of us foreigners think about the traffic here. One thing lead to another and now some people ask me “Since when did you become a traffic expert?”. I think my ideas are nothing special, just common sense.
So I got quite some exposure, see the pdf version of part of the special edition of The Economic Observer (“The World Economic Analysis”), done by glObserver.

The pdf version:
Then I was invited in a seminar 3 September by The Beijing Transportation Research Center, where I simply referred to my written report to the Mayor.

See here one of the many articles in the Chinese press. Then people told me they saw me in the Beijing metro, on the TV screens, where I was sitting in the meeting.
Yesterday I was interviewed by “Het Nieuwsblad” (Belgium). And USA Today also published an article, see the link. However, I do not remember saying the police guys were smoking the whole day in their car. That would be too stressful.
“Traffic in China fuels quest for road civility” – By Calum MacLeod, USA TODAY
(19 September 2010)
I just wish Beijing really starts doing something.

The economy and China: not getting better

The SCMP reported on 4 March that the mainland’s exports and imports declined further last month after a terrible January.
The trade figures would be weaker than January’s, commerce minister Chen Deming said on the sidelines of a meeting of the Chinese People’s Political Consultative Conference.
Mainland trade with the world took a turn for the worse in January, with exports falling 17.5% year on year to US$ 90.45 billion, much steeper than the 2.8% decline for December. Imports slumped 43.1% to US$51.34 billion, indicating slackening industrial demand.
The magnitude of the declines surprised many economists. Some blamed the drop on fewer working days in January because of the Lunar New Year holiday, which fell in February last year.
On 6 March: SCMP and other media reported that Beijing will run up a record deficit, as Premier Wen Jiabao announced, and he predicted this year would be “the most difficult so far this century”. The government is hoping higher public spending can revive the flagging economy.
Governments at all levels will run a 950 billion yuan deficit this year – seven times more than last year and equal to 3% of 2008 economic output. (not too bad compared to the USA)
“We will significantly increase government spending. This is the most active, direct and efficient way we can expand domestic demand,” Mr. Wen told the 3,000 NPC delegates. Higher public spending would allow the government to aim for economic growth of 8%, he said.

If one looks at the recent charts of the stock markets, we are finally getting at the low levels I was waiting for since months – below the 2002 levels. The concern is that mainland markets are still floating too high in a total disconnect from other main markets. So, fasten your belts.
Now here people start noticing how business slows down, people (many expats) are losing their jobs. Still, people are underestimating the impact of the recession.
The Chinese stimulus plan is still too modest and misses some key industrial segments – the SME. And more needs to be done for education and health care.
Curiously enough, quite a number of the much needed improvements here are similar with the USA – over there infrastructure (road, rail, air traffic, power lines, telecom, etc.), health care and education are also in dire need of improvement. No white elephants, real need to get it all improved.
I agree both the USA and China cannot make the mistake Japan made: not do enough and quickly enough. And avoid the Japanese bridges to nowhere.