Chinese airlines are expected to finalize contracts worth US$6 billion for 50 Boeing 787 Dreamliners early next month.

The agreement with the US aircraft manufacturer is part of a deal initially drafted in early January, according to a National Development and Reform Commission statement on Friday.

The airlines include Air China, China Eastern Airlines, Hainan Airlines, Xiamen Airlines and Shanghai Airlines, with the first aircraft delivery slated for June 2008, the statement said.

Production of the Boeing 787, a long-haul passenger jet with a seat capacity ranging from 223 to 296, will begin in 2006. The first flight is expected in 2007.

In January, Boeing inked an initial agreement to sell 60 Boeing 787 passenger jets with a catalogue price of US$ 7.2 billion to Chinese airlines.

That agreement also included China Southern Airlines, which was missing from Friday's announcement.

"We are still in the process of working with the six Chinese airlines to finalize the previously announced commitments for the 787s," George Liu, vice-president of Communications at Boeing China, told China Daily.

The announcement was made after Air China signed a contract last week with European aircraft maker Airbus for 20 A330 jets worth US$ 3.1 billion.

Chicago-based Boeing and its rival Airbus are battling for more orders from China, where a decade of 9 per cent economic growth has increased demand for air travel.

According to a Boeing estimate, China will need at least 2,300 aircraft in the next two decades to become the world's second largest aviation market after the United States.

China's fast growing civil aviation industry saw 121 million trips by air last year, a growth rate of 16 per cent, or twice the world average, according to official statistics.

The Boeing orders are a big boost for the Boeing 787, a mid-sized airliner expected to offer low fuel and operating costs, insiders say.

The big China deal was a positive sign for Boeing's strategy of not taking on the Airbus' double-decker super-jumbo and focusing on smaller planes.

Earlier this year, China signed a deal for five A350s from Airbus, a new model and a more sophisticated version of A330.

Airbus hopes to clock up some 200 firm orders by the end of the year for its A350 whilst it is also pushing hard its A380 super-jumbo, of which it has sold five to China Southern.

Boeing has so far registered 261 orders for its 787, while Airbus currently only has 10 firm orders for the A350, which is expected to be in service by 2010.

To cater to domestic needs, China is also keen to build its own short-haul aircraft and so wean itself off dependence on Airbus and Boeing, the world's top major commercial aeroplane builders.

China is trying to develop a market for domestically built 70-to-90-seat regional jets.

(China Daily July 30, 2005)