The company plans to set up a US$100 million airplane repair, modification and maintenance joint venture with local partners in Shanghai late this year, said Philip Condit, chairman and chief executive officer of the company, yesterday.

The move sends a message to the Chinese Government that Boeing is willing to commit to the Chinese aviation market, despite the number of Chinese airlines in the red because of the SARS outbreak earlier this year.

Boeing has forecast China's aviation market will increase by 7.6 percent annually in the next 20 years to become the second largest after the United States.

"Boeing is looking at a long-term partnership (with China), and finding ways to expand it, to build on it for the long-term future," said Condit at a press conference.

The Boeing chairman was visiting China to meet Chinese government officials.

Condit told Vice-Premier Zeng Peiyan that Boeing is also willing to expand technical transfers to China and to widen co-operation in research, development and aircraft manufacturing, the Xinhua News Agency reported.

One area of co-operation could see China play a part in Boeing's proposed 7E7 airplane, Condit indicated yesterday. The Chicago-based company is betting its future on the super efficient jet, which is scheduled to debut in the market in 2008.

"The role of China in the development and manufacture of the 7E7 airplane is being worked on at this time," said Condit.

But Condit dismissed rumors that Boeing is planning to set up an assembly line in Shanghai.

"At this time, it does not make any sense to talk about an assembly line in Shanghai," said Condit.

He said the company will focus instead on helping Chinese partners improve their manufacturing capacity, technology and know-how.

Despite the gloom surrounding China's aviation industry this year, Condit said China is an increasingly important segment of its global strategy.

To illustrate the great potential of the Chinese market, Condit compared China's current travel per capita with that of the United States.

In the United States, every person flies 2.5 times a year, while China's per capita travel is only 2 percent of that rate.

"Consider the market of 1.3 billion people. If the number of trips goes up by a factor of 50 as the market matures like in the United States, (it is pretty clear) how important China's market might be in the future," said Condit.

(China Daily July 12, 2003)