It is learnt from the Civil Aviation Administration of China (CAAC) that, in order to serve the development of the aviation industry, the CAAC financial support policies on general aviation, cargo transport, energy saving & emission reduction, technological innovation, sustainable security as well as airworthiness accreditation capability-building will be unveiled soon.

In addition, the financial policy system of the civil aviation industry will be further optimized; the support for the development of key areas and weak links in the industry will be strengthened while its sustainable healthy growth will be bolstered. Moreover, the existing financial policies guiding the subsidies for small-size and mid-size airports, regional airlines, special international routes and aviation infrastructure loan interest will be revised in order to highlight the "development guidance" core function of the policies, strengthen the prospective outlook and the targeting of the policies and finally increase the efficiency of the financial funds.

In 2011, CAAC carried out a series of thorough audits and investigations including checking the implementation and assessing the effect to evaluate certain financial policies such as the subsidy policies for small-size and mid-size airports, regional airlines, special international routes and aviation infrastructure loan interest. According to the auditing result, remarkable effects have been achieved with the implementation of the policies while positive reviews have been obtained from all related parties.

From the aviation enterprises perspective, these policies have improved the economic efficiencies, lowered the degree of losses and relieved the financial pressures. Benefited from the developments above, a safer operation has been guaranteed. Furthermore, the implementation of the policies have promoted a faster development transformation of the enterprises and effectively led them to a more voluntary and sustainable development direction.

From the industry perspective, these policies have played a positive role in balancing the gap between the development levels of eastern China and western China civil aviation industry, major and regional carriers, main and small airports as well as domestic and international services. Meanwhile, the policies have accelerated the construction of civil aviation infrastructure and enhanced the operation support capacity.

As far as the local authorities, not only did the policies arouse their enthusiasm in developing civil aviation but also brought more social forces into the construction and development of the industry.

On the other hand, during the auditing and investigating process, CAAC also discovered that a number of issues existed within the design and implementation of certain financial policies. As a result, the effects of these financial policies were inadvertently weakened. The main issues include: indistinct subsidies for small-size and mid-size airports; insufficient support to small airports; lacking beforehand instruction for regional airlines; inadequate preferential policies for under-developed areas and Tibetan-inhabited areas; unsatisfactory subsidies on international routes to encourage and support the strategic goal of globalization of Chinese airlines; deficient loan for infrastructure projects; intricate procedures for subsidy application and fund allocation.

Aiming at these issues, along with the consideration of the current circumstances, CAAC has started the revising process of several policies. The general idea of this revision is to emphasize the policies' core function of "development guidance", further strengthen the prospective outlook and the targeting of the policies, and increase the efficiency of the financial funds. The main contents of the revision are: narrowing-down the subsidy assistance to small-size and mid-size airports; enhancing the funding to capital lacking airports; consummating the subsidy process of regional airlines; adjusting the "aftermath" type of subsidy calculation; raising the subsidy levels for the under-developed areas and Tibetan-inhabited areas appropriately; reorienting the policy support to special international routes; improving the synchronization of the interest policies as well as the investment compensation policies.

It is also learned that, since the start of the Eleventh Five Year Plan (2006-2010), CAAC has strengthened the industry economic regulation enforcement, attempted to optimize the industry financial policy system. A series of policies have been put in place, such as subsidies for small-size and mid-size airports, regional airlines, special international routes, aviation infrastructure loan interest, etc. A total fund of 8.8 billion yuan has been allocated, including 4.2 billion yuan on small-size and mid-size airports, 2 billion yuan on regional airlines, 0.7 billion yuan on special international routes and 1.9 billion yuan on infrastructure loan interest.