China will set up a joint venture company in Shanghai this month for a "super-size" aircraft project, a senior official of the country's largest aviation maker said yesterday, a Beijing newspaper reported today.
The project is expected to have a total investment budget of between 50 billion yuan (US$6.99 billion) and 60 billion yuan.
China Aviation Industry Corp I, or AVIC I, will also propose a new aviation industry law during the ongoing 11th National People's Congress to ensure the progress of the super-size aircraft project, the Beijing News said, citing Meng Xiangkai, deputy director of Xi'an Aircraft Industry Company belonging to AVIC I and also a deputy of the National People's Congress.
Super-size aircraft are planes with more than 150 seats or with a payload of more than 100 tons, including military and civilian jets. Only six countries now have the capacity to manufacture such aircraft.
The high-risk project needs 10 or more years to accomplish, so an aviation industry law is necessary to guarantee support for the project, Meng added.
The project needs long-term investment from the government. If the capital chain is strong enough, China can keep pace with developed counties within 20 years, the report said, citing Wu Guanghui, a senior researcher of AVIC I.
The State-owned Assets Supervision and Administration Commission will inject cash into the company and become its largest shareholder, previous news reports said.
AVIC I will invest assets and cash in exchange for a stake to become the second-largest shareholder of the planned company.
AVIC II and other state-owned companies including Bao Steel will also invest, the Beijing News report said today.
Governments, including Shanghai, are expected to invest five billion yuan in the company, a previous report from Shanghai Securities News said.
AVIC I built the country's first regional jet, ARJ21, in December. The jet will make its maiden flight this month. The six-billion-yuan project is seen as a precursor to China building its own jumbo jets.