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2007-10-02 10:14:07
By Michael Bristow
BBC News, Beijing
China Aviation Industry Corporation I (AVIC I) is probably not a name that has executives at Boeing and Airbus quaking in their boots.
But the Chinese aircraft maker is currently assembling a regional passenger jet that it hopes will establish China as a major plane manufacturer.
The ARJ21 - which stands for Advanced Regional Jet for the 21st Century - is due to have its first test flight in March next year.
China believes this could be the start of a trend that will see the country build its own jumbo jets in the near future.
AVIC I, a state-run consortium based in Shanghai, says the regional plane is China's first independently developed passenger jet, although it will have engines made by US firm General Electric.
The plane, a model of which was on display at an aviation trade show in Beijing last month, has been primarily built for the Chinese market.
It has also been designed to cope with the high temperatures and high altitude runways it will encounter in China's western regions.
State-run media report that 71 ARJ21s, which will initially have 70 to 90 seats, have already been sold to domestic airlines, such as Shanghai Airlines. Other deals are pending.
These aircraft will be delivered from the end of 2009. A slightly larger version of the ARJ21, with 150 seats, will be produced later.
Expanding market
There will certainly be demand for more aircraft from China. In its latest forecast, Boeing said China would require 3,400 new planes worth about $340 billion over the next 20 years.
It expects China's domestic market to grow nearly fivefold by 2026, which will make it slightly larger than today's intra-North American market.
One of the problems in China is that even Chinese airlines do not want to buy China's own planes
Tom Ballantyne, Orient Aviation magazine
"Over the forecast period, China will have the fastest-growing market, making it the largest market outside of the US for new commercial airplanes," Boeing said.
With an expanding market, China is keen to develop its own manufacturing industry for passenger aircraft.
Li Zhiyong, from AVIC I's marketing and sales department, said: "At the moment, all aircraft that fly in China are made abroad so, sooner or later, China must produce its own planes."
But he added that the ultimate aim was to sell the ARJ21 abroad.
The firm already appears to have had some success. There are reports that Lao Airlines is considering buying two of the jets, becoming the plane's first foreign customer.
But, speaking at the Aviation Expo/China 2007, Mr Li said the most important hurdle had yet to be overcome.
"We have to get test flight licences from either Europe or the United States. This will allow us to sell the plane abroad more easily," he said.
Building expertise
AVIC I obviously hopes its plane will be a commercial success, but China does not hide the fact that the project has another role - to give technicians experience for future, larger projects.
"This is a big project for them," says Tom Ballantyne, of Orient Aviation magazine based in Hong Kong. "They are really hoping this will kick off airline production in China."
Earlier this year, the Chinese government confirmed that it wanted to build its own jumbo jets by 2020.
It believes it now has the expertise, and economic strength, to build a large passenger plane.
China also appears to think that, as one of the world's largest nations, it ought to have its own aircraft manufacturing industry.
"A home-made large aircraft may inspire the nation like the country's manned spacecraft program," said Liu Daxiang, from AVIC I's science and technology development department.
Mr Ballantyne agrees that China should be able to produce jumbo jets in the coming decades, but he says it might be difficult persuading airlines to buy the planes.
"One of the problems in China is that even Chinese airlines do not want to buy China's own planes," he said.
Boeing and Airbus, it appears, are not going to face any serious Chinese competitor any time soon.