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To: DaveMG who wrote (23332)	2/25/1999 9:18:00 AM
From: DaveMG	Read Replies (2) \| Respond to of 152472

CHINA: Battle for air traffic contract ft.com By James Harding in Beijing US, European and Japanese companies are competing to provide China's first regional air traffic control centre, the initial step in a sweeping $1.2bn programme to upgrade Chinese air traffic control systems. The contract offers a new scale of opportunity for foreign suppliers of air traffic management systems to China, but comes at a time of acute sensitivity in the US over sales of civilian technology that could have military applications. The contract, for a regional air traffic control system for Beijing, is part of the process of replacing the overstretched patchwork of 37 air traffic control towers with a network of 10 area control centres that would deliver much more detailed information about aircraft in China's airspace. An executive at one company bidding for the contract said: "In financial terms, as well as technological ones, this is a quantum leap for a foreign contractor. Instead of $10m an installation, this represents a $100m-$200m contract." The Beijing contract is expected to be worth $60m-$100m, but more deals are expected to follow shortly. Foreign companies are also preparing to bid to provide similar regional centres in Shanghai, Guangzhou and Wuhan. There are at least six companies bidding for the Beijing deal, including Lockheed Martin and Raytheon of the US as well as Thomson-CSF of France. The decision by the Civil Aviation Administration of China (CAAC) to spend $1.2bn to upgrade the air traffic system by 2010 is intended to reduce the risk of accidents and cope with rapid growth of passenger numbers, the official China Daily said yesterday. China's aviation safety record has improved dramatically since the early 1990s, when there was a spate of crashes and hijacks. However, a China Southwest Airlines aircraft carrying at least 50 people crashed in eastern China yesterday. Initial reports said there was a mid-air explosion, but one aviation official said later the Tupolev Tu-154 flew into a mountain. Industry analysts emphasise that the new radar equipment and software systems would be strictly for civilian use. The US has previously approved sales of ATC technologies to China. But one US businessman in China said that air traffic control "cuts across the defence and sovereignty issues. . . the PLA [People's Liberation Army] is the ultimate master of the CAAC and, of course, can use the ATC systems that the US contractor will provide for ostensibly civilian reasons." Reports of US sales to China of so-called "dual use" technologies - equipment serving a civilian function but with potential military applications - have recently raised alarm in Washington and put a strain on the relationship with Beijing. The US this week confirmed it had rejected a $450m Hughes satellite deal with a Chinese-led consortium because of fears that sensitive technology would get into the hands of China's army. US businessmen in Beijing and Shanghai are concerned that the rising political temperature in Washington over possible transfers of military technologies to Beijing is prompting the US administration to take an even more restrictive line on all high tech exports, which threatens to shut out US companies from large areas of China's civilian market.