December 10, 2025
by Wu Yunzhe
The Silent Order Book. French President Macron left China with diplomatic smiles but without the 500-jet mega-order Airbus had hoped for. This week: Liquor giant Wuliangye executes a $168M bailout of Sichuan Airlines, China Eastern flies the world’s longest route to secure food supply chains, and the indigenous C909 leaves the state-owned safety net for its first true market test in Xinjiang.
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Note: Starting this week, our publishing schedule moves to Wednesday to capture the full scope of early-week policy shifts.
The red carpet was rolled out, the handshakes were firm, and the diplomatic rhetoric was warm. But if you listened closely to the departure of French President Emmanuel Macron’s plane this week, you would have heard something missing: the rustle of a 500-jet purchase agreement.
While mainstream headlines celebrated the “approval” of 120 Airbus deliveries, our team notes that these were merely unblocks of existing backlogs. The real story is the silence.
This silence marks a fundamental pivot in Beijing’s aviation strategy. We are moving from the era of “Order Diplomacy”, where massive, headline-grabbing procurement deals were used as welcome gifts for visiting dignitaries, to an era of “Delivery Diplomacy.” Beijing is now hoarding its order book leverage against looming EU tariffs and US trade friction, while simultaneously fortifying its internal fortress.
This week saw a fascinating pivot inward, characterized by three distinct structural shifts:
That is our focus this week: The deafening silence of the Airbus order, the noise of the domestic capital shuffle, and the pragmatic shift in low-altitude logistics.
Chinese President Xi Jinping (L) and French President Emmanuel Macron attend a welcome ceremony at the Great Hall of the People in Beijing, China, December 4, 2025. | Photo courtesy of Reuters.
The Event: Macron’s Visit & The Missing 500 Jets. French President Emmanuel Macron’s state visit concluded with a flurry of cooperation agreements, but for the global aviation industry, the outcome was defined by what was absent.
The Official Line: Airbus confirmed that it had received approval to deliver 120 aircraft to Chinese carriers. The Reality: This is not a new order. These are aircraft already in the backlog—metal that has likely already been cut or welded—that were stuck in a bureaucratic holding pattern. The signed “Generic Terms Agreement” (GTA) merely clears the customs and regulatory path for existing commitments.
The “Ghost” Order: For over a year, industry insiders and Wall Street analysts have been tracking a potential mega-order of 500 jets involving the A320neo and A350 families. Historical precedent suggested this visit was the moment. In 2019, during Xi Jinping’s visit to France, China signed for 300 Airbus jets. In 2023, the “Big Three” ordered 292 jets. Despite the high-level diplomatic pressure and the presence of Airbus CEO Guillaume Faury, this 500-jet deal remains frozen.
Tianlux Insight: The Leverage Trap. Why did Beijing withhold the pen? This is a calculated strategic maneuver, not a bureaucratic delay.
The Verdict: The era of “gift-wrapping” multi-billion dollar orders for visiting dignitaries is fading. In 2026, China’s procurement strategy will be transactional, conditional, and piecemeal. Approving deliveries keeps the fleet running and satisfies immediate operational needs; withholding new orders keeps the politicians listening.
THEME: THE GREAT CAPITAL SHUFFLE
Drunken Capital: Liquor Money Fuels the Jets. In one of the most unusual cross-industry bailouts of the year, Wuliangye Group, the state-owned producer of China’s famous baijiu liquor, has officially become the second-largest shareholder of Sichuan Airlines Group.
The Deal Structure:
The Financial Reality Check: Why is a liquor company buying an airline? The answer lies in the distressed balance sheet of Sichuan Airlines.
Tianlux View: Balance Sheet Engineering. This deal represents “Balance Sheet Engineering” with Chinese characteristics. The aviation sector’s debt load is now so toxic that it requires cash injections from cash-rich, high-margin monopoly industries like baijiu to stay afloat. Wuliangye is the perfect “White Knight.” It is a provincial SOE with massive cash reserves and extremely high profit margins (often exceeding 70%). By directing Wuliangye to bail out the airline, the Sichuan provincial government is effectively transferring wealth from its most profitable asset to its most strategic infrastructure asset. It signals that the province views the airline not as a standalone business, but as essential infrastructure that must be saved, even if it means draining the profits of the liquor sector to do it.
The Logistics War Chest: China Post Air. While passenger airlines scramble for bailouts, cargo carriers are loading up on ammunition for a different war.
China Post Air completed a massive capital injection this week, increasing its registered capital by 1.46 billion RMB (US$ 210 million) to a total of 7.3 billion RMB (US$ 1.04 billion).
The Strategic Context: This is the fourth injection in five years. Why the rush?
Tianlux Insight: Expect this capital to be deployed immediately into widebody acquisitions. China Post needs more 777Fs or converted A330s to compete on the “Pacific Trunk” routes. This is not just about delivering mail; it is about securing the supply chain for China’s export manufacturing base.
THEME: HARDWARE AUTONOMY & INFRASTRUCTURE BETS
The C909 Goes “Frontier”: A Market Test. On December 8, Urumqi Air received its first C909 (formerly ARJ21), Registration B-659C. This delivery is far more significant than a standard handover.
Why it matters:
Tianlux Insight: The deployment of the C909 in Xinjiang is a strategic masterstroke. Xinjiang’s airports are high-altitude and often subject to extreme weather. If the C909 can prove high dispatch reliability here, it validates the platform for export to other rugged markets in Central Asia and the Global South. It is the ultimate “stress test” for Chinese commercial aviation.
The “Oceanic” Ambition: Dalian’s Offshore Hub. While the industry talks about a “profitless boom,” China Southern Airlines is making a massive, long-term infrastructure bet. The carrier initiated tenders this week for its base at the new Dalian Jinzhou Bay International Airport—the world’s largest offshore airport.
The Engineering & Strategic Scale:
Tianlux Insight: Why build an airport on the sea in a region (Northeast China) that is facing population decline?
Shenzhen’s Third Runway Opens: The Bay Area Capacity War. On November 29, Shenzhen Airport officially entered the “Three Runway Era”. With a 65 million passenger target for 2025, Shenzhen is aggressively expanding its capacity. The Conflict: This places Shenzhen in direct competition with Hong Kong’s Three-Runway System (which is also ramping up) and Guangzhou’s massive expansion. The Pearl River Delta now has three major hubs fighting for the same airspace and the same passengers. Tianlux View: Expect a fierce battle for international slots. Shenzhen’s new runway allows it to handle more widebodies, directly challenging Hong Kong’s traditional dominance in long-haul international traffic.
THEME: THE REALITY CHECK—SHOW VS. DOUGH
Logistics First, People Second: The Guizhou Breakthrough. While the media fawns over “flying taxis” in urban centers, the real commercial value of the low-altitude economy is being proven in the mountains.
JD Logistics and AutoFlight (Fengfei) completed a milestone flight in Guizhou this week.
The Case Study:
Tianlux Insight: This is the “Killer App” for eVTOL in China. Not urban air taxis (which face massive regulatory hurdles and safety concerns), but high-value, time-sensitive logistics in terrain where ground transport is inefficient. The “ton-class” payload capability moves this out of the realm of “drone delivery” (small parcels) and into “air cargo” (industrial supply chain). In 2026, the smart money will flow to these “B2B” logistics scenarios, which are easier to certify and monetize than passenger transport.
The “Show” Flight: Nanjing’s Tourism Loop. In contrast, Nanjing launched a manned eVTOL sightseeing trial at Purple Mountain this week using the EHang EH216-S.
Tianlux Verdict: We are seeing a divergence in the low-altitude economy. Path A (Logistics): High utility, solving real pain points (Guizhou), scalable unit economics. Path B (Tourism): High visibility, restricted by safety regulations, dependent on subsidy or high ticket prices (Nanjing). Investors should bet on the boxes (logistics), not the bodies (passenger transport), for the next 3-5 years.
The Antipode Link: Shanghai to Buenos Aires. China Eastern has launched the world’s longest single-flight milk run: Shanghai—Auckland—Buenos Aires. This 20,000km route fills a massive gap. The Signal: This is geopolitical connectivity masquerading as a flight route. It creates a “Southern Corridor” linking China to Latin America via New Zealand, bypassing traditional North American / European transfer hubs. Crucially, it secures the logistics chain for high-value imports like cherries and salmon, proving that aviation network planning is now a subset of China’s food security and trade strategy.
GE’s “In China, For China” Pledge. Celebrating its 45th anniversary in China, GE Aerospace reaffirmed its deep integration. The Stat: GE engines power the C919 (LEAP-1C) and ARJ21 (CF34), logging 19.7 million flight hours annually in China. The Signal: Despite decoupling rhetoric, the interdependence remains absolute. COMAC cannot fly without GE, and GE cannot ignore its largest growth market. The “MRO (Maintenance, Repair, and Overhaul) Network” GE is building in Shanghai is a “poison pill” against sanctions, it embeds the US manufacturer so deeply into the Chinese ecosystem that untangling it becomes commercially suicidal.
Visa-Free Dividends: Qingdao’s Surge. One year into the visa-free policy for South Korea, Qingdao Airport reports a 63.3% surge in inbound Korean travelers. The Insight: Policy works. Removing friction creates immediate traffic. We expect similar spikes from the new visa-free policies for Japan (recently reinstated) and other nations in 2026. This is the low-hanging fruit for boosting airport revenues amidst the “Profitless Boom.”
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