China has set up a 30 billion yuan (US$4.4 billion) fund in Xi'an, capital of Shaanxi Province, to invest in the aviation industry.

More than 60 percent of the fund will be used to invest in enterprises and projects in five national aviation bases - Xi'an, Harbin, Shenyang, Chengdu and Anshun.

The fund will also help finance the country's domestically made jumbo jet and regional jet projects if they lack money when put into mass production.

"The fund will attract private capital into China's civil aviation industry to promote the integration of resources and enhance the country's global competitiveness," said Jin Qiansheng, chairman of the fund.

The country's first national-level aviation fund, headed by Xi'an Yanliang National Aviation High-tech Industrial Base, has a registered capital of 300 million yuan and plans to raise 30 billion yuan to finance the aviation industry.

Many experts said the industry fund is a major measure to replenish capital in the capital-intensive aviation industry and ease reliance on bank loans.

"It is very popular in Europe that private capital tap into the aviation industry,'' said Anthony Neoh, former chief adviser of the China Securities Regulatory Commission. ''The new fund will help form an industrial cluster and improve the aviation industry chain in Shaanxi."

(Shanghai Daily June 30, 2009)