Chinese officials OK airplane building program

China wants to start providing planes for its airlines.
SHANGHAI, China (AP) -- China's top leaders have approved a program to build large commercial aircraft, lending crucial government support to plans to challenge the domination of Boeing and Airbus in the country's fast-growing aviation market.
A Cabinet meeting held last month approved "in principle" setting up a formal program for domestic companies to build large commercial aircraft, according to a statement seen Monday on the Web site of the State Council Information Office.
It said the decision followed a report by a group set up six months earlier to research the feasibility of the project.
No time frame was given, but last week a top official of state-owned China Aviation Industry Corporation I, or AVIC I, said that the company planned to start making large aircraft by 2020.
China has set a target of completing designs for a large aircraft by 2010 and has proposed producing its own aircraft engines.
China plans test flights of its first commercial jet aircraft, the midsize ARJ-21 regional jet, by next year. It also is seeking Federal Aviation Administration approval of the jet with a mind toward selling the ARJ-21 in overseas markets.
On a fast track
With China expected to buy 2,230 new planes between now and 2025, the government has fast-tracked development plans to ensure that its own companies grab a share.
China abandoned a project to build large aircraft in the 1970s, although local manufacturers already make many components for both Boeing Co. and Airbus SA. Airbus recently agreed to open a final assembly line for its midsize A320 aircraft in the northern city of Tianjin.
Large aircraft generally have about 200 seats or more and a payload of 100 tons. Initial versions of the ARJ, or "Advanced Regional Jet," are expected to carry 70-110 passengers.
The Cabinet resolved to build an "internationally competitive product," the statement said. Among key objectives was to ensure that domestic companies develop their own technology, while using international cooperation.
Welcome competition
Boeing officials said Monday they welcomed the potential competition from China.
Scott Carson, chief executive of Boeing's commercial jet-building division, also said China likely would produce a plane similar to Boeing's 737, a single-aisle, twin-engine jet with short-to-medium range.
"That would be the next logical step based on what they're doing today," Carson said in a conference call with analysts and reporters.
Chicago-based Boeing took an early lead in the Chinese aircraft market, selling more than 700 planes here since 1972, including 60 orders for the company's new 787 Dreamliner.
Chinese airlines also have about 100 Airbus planes in their fleets with dozens more on order, including five of the company's troubled A380 super jumbo.