The coastal city of Xiamen in Fujian province has emerged as a new hub for aviation maintenance, with a series of supportive policy measures implemented by the city's free trade zone leading to rapid growth in the industry.

Xiamen's aviation maintenance industry grew 24.8 percent year-on-year in value terms in 2016, reaching 12.1 billion yuan ($1.8 billion), according to data from the Xiamen FTZ.

The zone is now home to 12 aviation maintenance companies covering all aspects of the industry, from structural overhaul, to parts repair and manufacturing, to aeronautics training, after its establishment in 2015.

Fuelling this growth are the deepening reforms being introduced in the FTZ. Measures such as the fast-tracking of imports and the comprehensive supervision of bonded storage of supplies for repairs have made it quicker, cheaper and more secure for companies to maintain aircraft in Xiamen.

Another important factor has been the presence of industry leaders Taikoo (Xiamen) Aircraft Engineering Co, a subsidiary of the giant global conglomerate Swire, and ST Aerospace Technologies (Xiamen) Co (STATCO), owned by Singapore engineering group ST Engineering, which began operating in Xiamen in 1993 and 2011 respectively and have helped attract more companies to establish a presence in the city.

The FTZ has set ambitious targets for building on this success, aiming to grow the city’s aviation maintenance industry to at least 13.5 billion yuan in 2017, requiring year-on-year growth of 11 percent or more.

Ultimately, Xiamen hopes to use the success of its aircraft maintenance industry as a stepping stone to establishing the city as a hub for aeronautical manufacturing. The city even has ambitions to play a part in China's national strategy of localizing production of large aircraft.

A worker inspects an aircraft engine. [Photo/xmnn.cn]

More policy supports to be in place

The FTZ is bringing in a number of further reforms in a bid to realize these ambitions.

China's Ministry of Commerce recently gave the green light for the FTZ to apply supervision measures for bonded trade outside special customs supervision zones, as part of its plan to build an aviation maintenance industrial cluster to offer one-stop services to global clients.

This would optimize supervision for aviation maintenance companies' international businesses and ease the financial burden of complying with requirements for customs affairs security, allowing companies to allot more resources to improving their competitiveness and vertically integrating their businesses.

The zone also dramatically lowered import duties for hydraulic actuators and thrust ball bearings on Jan 1, 2017, from 14 percent and eight percent respectively to just one percent.

The two aerial materials cost Xiamen companies 36.5 million yuan to import in 2016.

If the measure proves to be a success, there is even a good chance the new tax rates will be introduced nationwide, Fujian Daily reported.

Workers maintain an aircraft engine. [Photo/xmnn.cn]