China's national planning agency has approved Airbus group's selection of Tianjin as the location of its A320 aircraft assembly plant which is the first away from European home territory for them.

The assembly plant will be located in the Binhai New Area (BNA) of Tianjin, a northern port city, said the National Development and Reform Commission (NDRC) on Thursday.

The first aircraft is expected to roll off the production line in 2008 and four aircraft will be manufactured every month up to 2011 according to a memorandum of cooperation between the two sides.

The NDRC said the assembly plant was an important step for those involved to make a long-term and sustainable commitment to the aviation sector. Aircraft manufactured at the plant would comply completely with the standards of European operations, they added.

Currently Airbus is making preliminary preparations for their new operation which will be the first time single-aisle commercial airliners have been produced entirely in China.

Airbus announced plans to establish a presence in China at the beginning of the year with the candidate cities being Tianjin, Shanghai, Xi'an in western Shaanxi Province and Zhuhai in southern Guangdong Province.

China has just announced preferential policies for BNA to develop it into a research base for modern high-grade manufacturing and an international aviation center in the north which would provide a good platform for the development of the Airbus plant. The A320 aircraft has 150 seats and there's significant demand for them in the market.

The great potential of China's aviation market attracted Airbus, said Dr. Li Yanhua of China's Civil Aviation University. It's been suggested that China's civil aviation sector could need more than 100 new aircraft every year. Therefore over the next 15 years around 1,200 new aircraft would be required by the country's civil aviation sector.

Airbus entered China's market in 1985 seeing the number of its aircraft operating in the country go up by ten times in the last ten years. At the moment Airbus hold 39 percent of China's civil aviation market with the remaining 61 percent being with Boeing.

Insiders say that the presence of Airbus in China will lead to fiercer competition between the two aircraft giants.

Experts say the venture marks an important step for China in manufacturing large aircraft and also indicates an adjustment in China's strategy for securing such business.

China placed the proposal for large aircraft manufacture in its 11th five-year development plan. It's also been listed as a major project in the country's long and mid-term development plan for science and technology.

Dr. Li Yanhua said the assembly project, to some extent, would help promote China's innovation in aircraft manufacturing and assist improve related technologies.

(Xinhua News Agency June 9, 2006)