May 11-- China set up a company to build large jets, challenging the dominance of Airbus SAS and Boeing Co. in the market for planes with 150 seats.
China Commercial Aircraft Co. was formed today with an initial investment of 19 billion yuan ($2.7 billion), according to a statement on the central government's Web site. Investors in the company include China Aviation Industry Corp. I, or AVIC I, and AVIC II.
China aims to build a 150-seat aircraft by 2020 to support the expansion of its domestic travel market and to compete with Boeing and Airbus overseas. The plan is also part of China's wider drive to develop more sophisticated products, such as ships, cars and computers, to cut its reliance on overseas suppliers.
``This is the dream of several generations and we will finally realize it,'' Premier Wen Jiabao said in the announcement. ``We should rely on ourselves to build the large planes' main technologies, materials and engines.''
Zhang Qingwei has been appointed chairman of the company, while Jin Zhuanglong was named president, the announcement said.
China aims to triple its fleet of passenger and cargo planes to 4,000 by 2020 as economic growth lifts travel demand in the world's second-largest aviation market, according to the General Administration of Civil Aviation.
The State-owned Asset Supervision and Administration Commission will invest 6 billion yuan to become the largest shareholder in China Commercial Aircraft, the 21st Century Business Herald said yesterday. The Shanghai city government will spend 5 billion yuan to take the second-biggest stake, it said.
AVIC I will invest 4 billion yuan, while AVIC II, Baosteel Group Corp., Aluminum Corp. of China and Sinochem Corp. will each invest 1 billion yuan, the Beijing-based newspaper said.
(Bloomberg)
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