The Aviation Industry Corp of China will offer plane-making assets to Xi'an Aircraft International Corp as part of a wider shake-up of China's aerospace sector to compete in the world market.

The assets to be transferred to Xi'an Aircraft, a unit of AVIC, include component factories in the cities of Shenyang and Chengdu, Geng Ruguang, executive vice president of AVIC, told reporters in Shanghai today.

Talks with the government to nail down the timeline for the deal are under way, he said.

The Shenyang plant in Liaoning Province will specialize in making tails, while the facility in Chengdu, capital of Sichuan Province, will focus its business on plane fronts, he added.

Wings will be built in Xi'an City, the capital of Shaanxi Province, he said.

AVIC won't inject money-losing assets into Xi'an Aircraft, Geng emphasized. He declined to give a value for the assets that will be transferred.

China has merged its two largest aerospace companies to form AVIC as it aims to build aircraft to compete with Airbus SAS and Boeing Co. The government is also encouraging state-owned companies to transfer assets to listed units to boost efficiency and financial transparency.

China is aiming to develop its first 150-seat passenger jet by 2020. A draft plan for the so-called "Big Plane'' will be completed this year, Wu Guanghui, its chief designer, said earlier this month.

(Shanghai Daily November 20, 2008)