With fewer than 200 private jets for a population of 1.3 billion people, China's growth potential is huge. But reams of red tape, snarled-up air space and a shortage of trained pilots suggest it won't live up to the promise any time soon.

The private jet potential has caught the attention of some big-name investors. Warren Buffett's NetJets made the world's largest order of executive jets in June in a deal worth $9.6 billion, months after it announced a China venture with private equity firm Hony Capital.

China is forecast to take delivery of about 100 business jets this year. Before they can fly, buyers need to secure an Air Operator's Certificate from the country's aviation regulator or a management company that has already been granted one. Then the jet owner has to wait for an import licence.

"The process you have to go through to get the importation approval has to be signed off by nine departments," said Jeffrey Lowe, general manager of Asian Sky Group, a business aviation consulting firm.

Private jet ownership was illegal in China until 2003, and the aviation regulator has been slow to process paperwork for new operators. About 80 are awaiting certificates, with only up to 20 expected to get one in the next three years, taking the total number of business jet operator certificates in China to 30 by the end of 2015, under the regulator's working plan.

The Civil Aviation Administration of China, or CAAC, has also capped at 12 the number of jets that can be imported annually by each certificate holder. Most of the existing 10-12 holders are new to the industry and lack sufficient skilled staff to take their full quota.

China had just 180 airports as of the end of 2011, and the powerful military controls 70 percent of its air space, leaving limited room to navigate and land planes.

Then there is the matter of finding people trained to fly and maintain them. Boeing Co (BA.N) estimates China will need 71,300 pilots and 99,400 technicians in the next 20 years to handle a growing commercial fleet.

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Boeing said on Wednesday that China would need 5,260 new airplanes by 2031, although that figure covers larger aircraft normally flown by commercial airlines.

For the business jet market alone, Bombardier (BBDb.TO) expects China will take delivery of 1,000 aircraft from 2012-2021 and a further 1,400 in the following decade.

Another airplane maker, Embraer SA (EMBR3.SA), thinks China will need 635, or $21 billion worth, of new executive jets over the next 10 years.

Swiss-based Vistajet, which signed a deal in March with Air China Ltd's (601111.SS) (0753.HK) private jet arm, Beijing Airlines, hopes to get approval to fly one of its jets from China in the first half of 2013 on its Chinese partner's certificate.

NetJets, which is owned by Buffett's Berkshire Hathaway Inc (BRKa.N), did not respond to requests for comment on this story.

But some industry analysts think expectations are running a bit too high because of the shortage of skilled staff, slow development of infrastructure and the government's reluctance to hand out operator certificates.

"The giddy aviation-company lemmings who rushed into China should now trim their near-term expectations," said business aviation market analyst Brian Foley, of Brian Foley Associates.

"Although the China region provided a steady sales stream of large and expensive jets at the height of the world economic downturn, we see that trend rapidly losing steam."

Foley expects China will account for 3-4 percent of global business jet deliveries over the next decade, or less than half of the more than 10 percent forecast by Canada's Bombardier.

A slowing economy also casts doubt on short-term growth prospects.

Zhou Xiaozhou, marketing manager of Shenzhen-based business jet operator Donghai Jet Co Ltd, said corporate clients were cutting back on overseas trips.

"Our business has slowed a lot this year and (is) likely to be just half of that in 2011, due to the weak global economy and increased competition," Zhou said.

At least one industry executive welcomes a bit of doubt about China's potential.

"Sure there is scepticism and I think it's helpful because it brings sanity to projections," said Ernest Edwards, the head of Embraer's executive aviation division. (Additional reporting by Susan Taylor in TORONTO and Brad Haynes in SAO PAULO; Editing by Anne Marie Roantree and Emily Kaiser)

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