The company, named Commercial Aircraft Corporation of China Ltd (CACC), will be responsible for the research, development, manufacture and marketing of large-homegrown passenger aircraft.
The new project has been launched to eliminate China's dependence on Western producers. At present, around 50% of the Chinese aircraft market is controlled by Boeing. It estimates China will need at least 2,600 new aircraft worth over $200 billion in the next 20 years.
Major shareholders include the State-owned Assets Supervision and Administration Commission, the Shanghai government, aviation companies and other state-owned enterprises.
Each of the three state-owned firms, namely the country's major metal producers, Baosteel and Chinalco, as well as Sinochem Co, will invest 1 billion yuan for a 5%.
China's top two aircraft producers, the China Aviation Industry Corporation I (AVIC I) and the China Aviation Industry Corporation II (AVIC II), will mainly invest in the form of production assets they now have.
China plans to fly its first large passenger airliner in 15 years. It usually takes 10 to 20 years of research and development to develop such a company, an Avic I source said.
The establishment of the passenger aircraft company was approved in February 2007 by the State Council, China's cabinet. The aim being to develop the country's capability of building aircraft with a take-off weight of more than 100 tons, or planes with more than 150 seats.
