Date
19 October 2017
China’s ARJ21-700 regional jet, which entered commercial service in June, uses engines produced by General Electric Co.  China has formed a state-owned company to develop China-made jet engines. Photo: WSJ
China’s ARJ21-700 regional jet, which entered commercial service in June, uses engines produced by General Electric Co. China has formed a state-owned company to develop China-made jet engines. Photo: WSJ

China moves closer to becoming aerospace giant

China has created a state-owned aircraft engine maker, a key step toward a homegrown aerospace industry.

President Xi Jinping said Aero Engine Corp. of China (AECC) is a “strategic move” to speed up the development of indigenous jet engines, the Wall Street Journal reports, citing state media.

The new company, which has 50 billion yuan (US$7.5 billion) in registered capital and 96,000 employees, will focus on the design, manufacture and testing of aircraft engines, according to state news agency Xinhua.

Investors include the Chinese government and two state-owned firms — Aviation Industry Corp. of China, an aerospace and defense conglomerate, and Commercial Aircraft Corp. of China, which produces passenger jets.

China has struggled to produce advanced jet engines capable of matching foreign rivals, despite significant state funding and decades of effort.

Many Chinese military jets use Russian-made engines, while the country’s two homegrown passenger-jet designs rely on Western-made engines.

By setting up AECC, Beijing hopes to create a self-sufficient aerospace sector that can serve commercial and military aviation needs with homegrown technology, industry analysts say.

AECC consolidates existing aircraft-engine businesses into a single entity.

In March, three listed companies — AVIC Aviation Engine Corp., Sichuan Chengfa Aero-Science & Technology Co. and AVIC Aero-Engine Controls Co. – announced that they were due to become part of the new company 

The move also dovetails with Beijing’s efforts to revamp its state-owned manufacturing sector, with the aim of creating high-technology industrial champions in aerospace, robotics, nuclear power and other fields.

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