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Could Chinese Engine Conglomerate Compete Against GE?

March 3, 2016
A new Chinese jet engine conglomerate could one day compete against the likes of Rolls Royce and General Electric.

SHANGHAI -- Aerospace giant Aviation Industry Corp. of China (AVIC) on  March 3 announced the leadership for a new Chinese jet engine conglomerate that could one day compete against the likes of Rolls Royce and General Electric.

China does not make large commercial jet engines of its own and the country's narrow-body airliner, the C919, is powered by engines from CFM International, a venture between GE of the United States and France's Safran.

Beijing is looking to change that with the creation of a new national champion in the field as it seeks the prestige of having its own aviation sector.

AVIC dominates the aviation industry in China and at least three of its listed subsidiaries will be injected into the new company: Sichuan Chengfa Aero Science and Technology, Avic Aero-Engine Controls, and Avic Aviation Engine, according to separate statements.

The name of the new engine company was given as "China Aviation Engine Group" in Chinese.

Bloomberg News reported in January that the company will have total assets of 145 billion yuan (US$22 billion) and will be formed through the merger of more than 40 firms.

Industry officials say it could take years for the firm to develop the engines to power big commercial jets.

AVIC said it would provide the new company's top executives, including its chairman and Communist party secretary Cao Jianguo and general manager Li Fangyong.

Avic Aviation Engine Shanghai-listed stock rose 1.49% on March 3, but the other two companies fell after the announcements.

The C919, China's first domestically-developed big passenger plane, rolled off the assembly line in November and the 168-seat aircraft, built by the Commercial Aircraft Corp. of China (COMAC), is scheduled to make its first test flight this year.

COMAC is also producing a smaller regional jet, the ARJ, and has ambitions for a wide-body plane, as Beijing seeks to challenge foreign giants Airbus and Boeing for market share.

Copyright Agence France-Presse, 2016

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