Monday, November 3, 2008

China plane-makers target aviation giants as airshow opens

ZHUHAI, China (AFP) — China's only international airshow opened here on Tuesday as the host nation looked to take another step on its ambitious journey to rival the global players of the aerospace industry.

Around 600 civil and military manufacturers, suppliers and designers have gathered in the southern city of Zhuhai for the biennial Airshow China, which lasts until Sunday.

The list of exhibitors was headed by the two manufacturing giants of the industry, Boeing of the United States and Europe's Airbus, but China was also expected to announce a landmark overseas sale of homemade commercial planes.

The Commercial Aircraft Corporation of China (CACC) was expected to confirm it has sold 25 of its jets to a US company, thought to be General Electric's leasing unit, according to state media reports.

The firm has designed China's first homemade jet, the 70-seater ARJ21 -- it stands for Advanced Regional Jet for the 21st Century -- and reports have said the contract will be worth 735 million dollars.

"To fly Chinese large aircraft in the blue sky is not just the will of the government, but the whole nation," CACC's president Jin Zhuanglong told an aviation conference in Zhuhai on Monday.

Lin Zuoming, president of the Aviation Industry Corporation of China, a key backer of CACC, highlighted the ambition of the nascent industry.

"The goal for AVIC is to realise 1,000 billion yuan (145 billion US dollars) of revenue sales by 2017 and (be) close to becoming one of the world-class aviation industry players," he told the same conference.

AVIC plans to acquire a foreign aircraft manufacturer to strengthen its development capabilities, the state-run China Daily newspaper reported Tuesday, citing Tan Weidong, president of subsidiary AVIC General Airplane Company.

An acquisition agreement was likely to be signed by the end of this year, Tan said, without identifying the foreign company.

Laurence Barron, president of Airbus China, said his firm welcomed competition from Chinese manufacturers, but added it would be a long time before they vied for global dominance.

"It is going to be a tough challenge," Barron told AFP in an interview.

"But we have seen China meet its challenges, particularly in space. We should not underestimate their will and their ability, and the fact that they are prepared to look at it as a long-term objective."

Boeing and Airbus remain bullish about the long-term demand for new aircraft in China despite the global financial meltdown .

There are early signs China has not escaped the drop-off that has hit the global industry, with both analysts and airlines warning of a "cold winter" of slowing passenger demand.

However, Boeing research released last week estimated China will need 3,710 new commercial planes worth 390 billion dollars over the next 20 years.

Airbus is also optimistic, but will not be announcing any major new deals at Zhuhai, Barron said, although he added that was normal for Chinese airshows.

In 2007, China's air traffic soared 16.8 percent to 387.6 million passenger trips, on the back of 16.7 percent growth in 2006, state media reported.

The demand has sparked a similar boom in airport construction, with around 100 new airports planned by 2020.

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