China’s First Aircraft Carrier Begins Sea Trials

Beijing – August 10. In Dalian city, construction of the aircraft carrier ‘WaLiangGe’ was completed and in 10 days following its complete, the vessel left on its maiden voyage from its homeport to carry out various training exercises. The aircraft carrier has conventional power with a full load displacement of about 67000 tons.

China’s defense ministry on July 27, first confirmed the completion of the transformation of ‘WaLiangGe’ and in the news, he said that it will be used for “research, testing and training”. This is clearly an important venture for Chinese maritime ability and strength. The analysis, research and any future building will be done in Shanghai shipyards in addition to the introduction of flight training for pilots of aircrafts and also military drones.

The building of the Chinese aircraft carrier’s first voyage also brings about many economic interests as Carrier-related stocks have been seen to increase slightly due to the recent news.

Carrier-related Stocks Showing Gains

On August 9 2011, due to the Chinese aircraft carrier’s first tests, the stocks of Chinese suppliers of ships posted notable gains as generally rising prices in the broader market could be observed. The actual stocks rose only slightly however, with no significant fluctuations. By 14:09, China Heavy Industries (601989) rose 1.31 percent, China Shipping (600,150) rose 1.06%, Guangzhou Shipyard International (600685) rose 0.87% and Nakagawa shares rose 0.86%.

“Building aircraft carrier battle group is a huge systematic project, involving aircraft carriers, carrier-based aircrafts, auxiliary ships and other combat units. The construction of aircraft carrier battle groups will drive a huge industry investment and surely create many jobs in the local areas. It is estimated that the construction of a complete aircraft carrier battle group requires investment over US $10 billion.” Don guan Securities analyst LIU Zhou ping told reporters that combined with our technology development; medium carrier construction is the most likely choice. Depending on the media’s prediction, China may build two more aircraft carriers with the total cost at around 10 billion to 15 billion US dollars. If one includes the subsequent, necessary annual maintenance and support costs, China’s aircraft carrier-led investment could be as much as $100 billion dollars.

This future process of building Chinese aircraft carriers, along with the $100 billion of funds as a stimulus, (including high-end equipment manufacturing, high-end materials and many other high-tech industries) will lead to the development and continuing of this golden period in Chinese economic history. This will also similarly play a big part in contributing to the continuing evolution of the military role that China plays in the region.

• Fiona Yang, CPG Sourcing Associate