Free China Airborne by James Fallows

Even if attacking by air, it would have to send its bombers on long, difficult missions to reach the factories, rather than attacking them where they had been, in obvious concentrations near the coast at Guangzhou in the south, Tianjin in the north, or Shanghai in between. One of the predictable surprises of traveling though today’s Chinese countryside is coming across steel mills, engine works, and other derelict-looking heavy industrial sites far from major cities—not that the major cities are short on them. The nationwide dispersal of industries, while intended as a national security measure and as a way of bringing opportunity to the hinterland, also meant that areas of rural China you might expect to be “pristine” now can have as heavy a pall of industrial smoke as the biggest cities do.
    As applied to aviation, the dispersal plan led to small factories all over the country, plus a major concentration of airplane factories and related plants outside the famous central city of Xi’an. In Chinese history, the city was known as Chang’an—, “long peace”—and was a capital through ten dynasties in Chinese antiquity. Its modern name, Xi’an, or, means “western peace.” In modern history, Xi’an is known for the thousands of terra-cotta warriors on its outskirts. But among its distinctions, from the
sanxian
perspective, is that among China’s major cities it was the one farthest from any land border, the counterpart to a site in Kansas or Nebraska in the United States, and thus theoretically safest from aerial attack. (And of course during the Cold War the United States based much of its nuclear missile and bomber fleets in the Great Plains, for similarreasons.) Today, some quarter million people, more than the total worldwide payroll of Boeing and Airbus combined, work in Xi’an’s aviation industries, supervised by a Chinese engineer in his fifties who has a bust of George Washington in his office.
    The Chinese industrial sector as a whole was inefficient and poorly designed, by world standards, during the Mao era, and the same was true of its aerospace factories. “A major structural weakness and a legacy of the Maoist past is the widespread duplication and balkanization of industrial and research facilities,” Tai Ming Cheung, of the University of California, San Diego, said at a U.S. government hearing on “China’s Emergent Military Aerospace and Commercial Aviation Capabilities” in 2010. 7 He pointed out that technically backward, underfunded Mao-era China had well over a hundred separate airplane-related factories or research centers all across the country. Far from pooling their limited resources or coordinating their efforts, they were active rivals for funding and prominence, meaning that together they made even less progress than they might otherwise have done.
    Until the late 1970s, the operations of China’s domestic airlines were similarly state-controlled and sheltered from market forces. The few airlines in existence sent the few airplanes they had to a few cities along a limited number of state-mandated routes. The few passengers were not allowed to buy tickets unless they had authorization from their
danwei
, the Party-led business or work unit that controlled most aspects of their lives. During the most totalitarian periods under Mao, authorization from the
danwei
was needed before members could marry, have children, consider different jobs, or travel inside or (rarely) outside the country. The whole air-travel network operated more or less the way military air travel does in the United States, without the efficiency or the scale. Thus its transformation intoa system that had to compete with, or at least coexist alongside, established international carriers, while expanding domestically on pace with the new era’s growth, was as difficult as for any other Chinese industry—if not more so.
How other countries did it
    Economists use the term “path dependence” to convey the