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JV Approved to Produce Jets
China may be quickening its pace in developing its own regional jets for the booming domestic aviation market by co-operating with a foreign partner.

Reliable sources said the central government has approved a regional aircraft joint venture between the China Aviation Industry Corp II (AVIC II), one of the two major aviation manufacturers in China, and Brazilian aircraft manufacturer Embraer.

The joint venture will be located in Harbin in Northeast China's Heilongjiang Province and is expected to produce 50-seat aircraft, sources said.

The two companies will announce the details at the Airshow China 2002 in Zhuhai held from November 4 to 10, said sources who would not give their names.

Mauricio Botelho, president and CEO of Embraer, had earlier said that his company wants to be a part of the development of China's aircraft industry.

"Embraer expects to seal an agreement for a joint-venture aircraft manufacturing plant in China by the end of this year," Botelho said.

The new company is expected to assemble aircraft and deliver the first airliner within 18 months upon the contract's signature, he said.

Last week, the China Aviation Industry Corp I, the other major aviation manufacturing enterprise, which also has plans to produce regional jets, said it will spend about 5 billion yuan (US$602 million) to develop a 72 to 79-seat ARJ aircraft.

This aircraft project has passed examination and has been approved, and will conduct trial flights by 2005 and sell the jets by 2007, the company said.

Guan Dongyuan, managing director and chief representative of Embraer China, said Embraer attaches great importance to the development of the emerging market of China's aviation industry.

"We believe the current reform and consolidation in the Chinese airline industry will lay a solid foundation for the rationalization of the airline networks," Guan said.

The central government's decision to develop the western part of the country and the success of Beijing's bid to host the 2008 Olympic Games will open opportunities for the regional aviation market, he said.

Experts said the country is expected to demand some 583 regional jets, with 50 to 110 seats and a flight range of 600 kilometres and 1,200 kilometres, in the coming two decades.

By 2020, China's passenger fleet will have 1,852 aircraft and the ratio of regional jets to the total fleet will rise from the current 14.7 per cent to 31.5 per cent, they said.

"Transport by regional jets will become a new growth area of the country's civil aviation industry."

Zhang Hongbiao, vice-minister of the State Commission of Science, Technology and Industry for National Defence, said China would give top priority to the research and development of regional aircraft in the coming decades.

Production of regional airliners is the best choice for the nation as the aviation industry currently lacks the capability to produce larger planes competitively, he said.

The State has already announced plans to create preferential conditions for the use of regional airlines, he said.

A number of airports will be upgraded and around 36 new airports will be built within the next five years that are suitable for smaller planes, he said.

In encouraging the use of small aircraft, civil aviation authorities also announced a reduction of airport construction fees.

(China Daily September 12, 2002)

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