China is fast becoming a major world producer of aircraft parts and components as foreign aircraft manufacturers, including Boeing and Airbus, are stepping up production in the country.

A Brazilian company has taken the lead in setting up a joint venture with a Chinese company to assemble a new civilian jet.

Their increased interests in sourcing from China is a testament to the technological achievement of China's aircraft industry, which has become known for its quality and cost efficiency.

David Wang, president of Boeing China, says Boeing is rapidly expanding its industrial cooperation with Chinese companies.

"We plan to increase production rates of model 737 airplane assemblies built in China at Xi'an, Shanghai and Shenyang,"he said.

Boeing is also planning a new major airplane maintenance and repair facility in Shanghai, he said.

The ARJ21 jet, a new regional jet model to be built by China Aviation Industry Corp I, is supported by Boeing technical contracts, Wang said.

The joint venture BHA Aero Composites Co Ltd will have additional opportunities as airplane production rates and support contracts increase, he said.

Boeing and China's industrial cooperation began in the mid-1970s. Since then, teams of Boeing manufacturing, quality and planning experts have been in China providing on-site training for building Boeing parts and assemblies.

"Boeing's industrial partnership with China is real and current. It is not a promise for another several years," Wang said. "Our emphasis is that these programs should be able to add value to our Chinese partners as much as possible and as soon as they can.

"It is Boeing's hope to build on these accomplishments and achieve a greater mutual success for many more years to come," he added.

Today, China's aviation manufacturing companies are playing key roles in Boeing's global supplier network, Wang said.

There are now more than 3,200 Boeing aircraft in service that include major parts and assemblies built by China. "This equals to more than a quarter of all Boeing airplanes in service worldwide."

Boeing has procured about US$500 million in aviation hardware from China. "This is projected to double by 2009 and reach US$1.3 billion by 2010."

Compared with Boeing, Brazilian regional jet manufacturer Embraer is a latecomer to the Chinese market.

It entered China in May 2000, when it established a representative office in Beijing. But its co-operation with Chinese manufacturing partners went a step further: It established a joint venture with the China Aviation Industry Corp II last year, mainly producing ERJ145 family jets.

Last month, the first 50-seat ERJ145 aircraft produced by the joint venture made its maiden flight in Harbin, in Northeast China's Heilongjiang Province.

"The first Embraer aircraft manufactured outside Brazil represents Embraer's long-term commitment to the Chinese aviation industry, from both the airline operation and industrial points of view," Mauricio Botelho, president and CEO of Embraer, said.

Airbus and its parent company European Aeronautic Defence and Space Company (EADS), the world's second-largest aerospace and defence company, also showed increased interest in China's aviation manufacturing industry.

"Airbus is not only selling aircraft in China, but also committed to the long-term development of China's aviation industry," said Laurence Barron, president of Airbus China.

Airbus plans to considerably increase its procurement from China in the coming years, which would be worth US$60 million annually by 2007 from the current level of about US$10 million annually, Barron said.

Industrial cooperation between Airbus and the Chinese aviation industry began in 1985, when the General Administration of Civil Aviation of Shanghai, now China Eastern Airlines, became the first carrier in China to operate the European consortium's aircraft.

Contracts for Chinese companies to build sections of Airbus aircraft followed, as did further orders from Chinese airlines.

Aerospatiale, which is now Airbus France, signed the first product sub-contracting agreement in 1985 with Xi'an Aircraft Company on manufacturing and assembling access doors for Airbus A300/A310 widebody aircraft.

Since then, the total value of projects subcontracted by Airbus to Chinese manufacturers has exceeded US$500 million.

In 2002, Chinese manufacturers delivered more than US$12 million worth of aircraft components to Airbus.

"Airbus"industrial co-operation with China made further progress last year," Barron said.

In March, Airbus signed a contract with China National Aero-Technology Import & Export Corp and Chengdu Aircraft Corp for three new work packages, under which Airbus subcontracted three key projects valued at US$33 million to the Chengdu company.

In October, Airbus and Xi'an Aircraft Company signed several contracts worth more than US$7.5 million to strengthen bilateral cooperation. The contracts covered increasing production rate of A320 access doors, A330/A340 brake blades and passenger door skin for the A320 family.

In July, the Jinling Shipyard launched a roll-on and roll-off vessel for the transportation of A380 components.

"Today more than ever, EADS remains strongly committed to further strengthen its partnership with the Chinese industry," Philippe Camus, CEO of EADS, said.

In November, Eurocopter, another subsidiary under EADS, signed an agreement with Harbin Aircraft Industry Group Corp, China National Aero-Technical Import & Export Corp and Singapore-based Technologies Aerospace to jointly produce the five-seat EC120 helicopters in China.

"The agreement is a new consistent step in the gearing up of the EADS partnership with the Chinese industry,"Camus said.

"The agreement will allow us to reach a new level and quality in the long-standing relationship between Chinese industry and EADS,"he added.

In October, EADS subscribed for 5 percent of the issued shares of the Chinese aviation automobile manufacturer AviChina Industry & Technology Co Ltd in the Chinese company's initial public offering on the Hong Kong Stock Exchange.

The value of the investment is worth about 30 million euro (US$37 million). "EADS becomes a strategic partner,"Camus said.

EADS and AviChina will cooperate in the development, manufacturing and upgrade of aviation products, including helicopters and trainers, he said.

"China is a strategic market, to become the second largest aviation market after the United States,"Camus said.

China needs 2,400 new jet airplanes, according to a latest forecast by Boeing. By 2022, Chinese carriers will fly more than 2,850 passenger and cargo airplanes, Boeing said.

(China Daily January 15, 2004)