China officially launched a new multi-billion dollar jet engine conglomerate with almost 100,000 employees at the weekend, as Beijing seeks to become an aerospace power and compete with the likes of Rolls-Royce and General Electric, reports BSS.
The Aero Engine Corporation of China (AECC) has registered capital of 50 billion yuan ($7.5 billion), and previous reports said it would incorporate subsidiaries of a series of state-owned firms, including the Aviation Industrial Corp. of China (AVIC).
President Xi Jinping said founding the company was a “strategic move” to make China an aviation power and modernize the military, the official Xinhua news agency reported.
A model aircraft is displayed at the reception of the China Aircraft Leasing Group office in Hong Kong, China
China does not make large commercial jet engines of its own and the country’s narrow-body airliner, the C919, is powered by engines from CFM International, a venture between GE of the United States and France’s Safran.
The best aircraft in China’s air force use engines built in Russia, Xinhua said. Beijing is looking to change that with the creation of a new national champion in the field as it seeks the prestige of having its own aviation sector.
Leaders have targeted the manufacture of high-technology products such as jet engines as a means to transform the world’s second-largest economy and make its firms more competitive with advanced foreign rivals in aerospace,biotechnology, alternative energy and other sectors.
Premier Li Keqiang said in written comments that making “breakthroughs” in advanced aircraft engines would have great value in strengthening the military and manufacturing ability of the country. Xinhua cited him urging indigenous innovation to make AECC a world leader in aero-engines.
The new firm will employ 96,000 employees and be headquartered in the capital, reports said, with China’s State Council, or cabinet, and the Beijing city government also investing in it. But industry executives say it could take years for the firm to develop the engines to power big commercial jets.
Earlier this summer China’s homegrown regional jet the ARJ21, made by AECC investor the Commercial Aircraft Corp. of China (COMAC), made its first commercial flight after years of delays, though its quality and reliability still have to be established to win over customer and passenger confidence.