European aerospace group EADS is set to sign a deal today with Chinese firm Avicopter to build a factory for producing carbon-fibre composite for its new A350 jetliner, the Spanish government said. The joint venture agreement will be signed during a visit to Spain by Chinese Prime Minister Wen Jiabao.

The plant will come up in the Chinese city of Harbin.

Spain has a five per cent stake in EADS, which owns the world's largest commercial airplane maker, Airbus.

The A350 will be 53 per cent carbon-fibre composite which will allow the aircraft to fly a larger number of passengers for the same fuel load.

Airbus and China have earlier signed a memorandum of understanding to build five per cent of the A350's airframe in China. China has already signed a deal to locate a final assembly line for the Airbus A320 in Tianjin.

Earlier this month, Airbus announced it would begin construction of a factory for the 10 billion euro ($13.08 billion) A350 project, which is a direct competitor to rival Boeing Co's 787 Dreamliner.