China sets up new entity to develop aircraft engines, gas turbines

China had set up a new state-owned aviation firm to help achieve one of its top tech goals of building a world-class aircraft engine.

The new company, the Aero Engine Corp of China (AECC), would be responsible for the research, development and manufacturing of aircraft engines and gas turbines, according to Chinese state media.

The company boasts 50 billion yuan ($7.5 billion) in registered capital, and has a workforce of 96,000 employees.

The new firm is part of China's drive to emerge as a global aviation player, with its establishment having been hailed a "strategic move" by president Xi Jinping, according to written remarks published by state media. It would help China's military reduce its reliance on foreign-made engines.

China had long sought to acquire capabilities to build its own jet engines, which had become a priority as the country pushed to increase its military clout. Beijing's most recent five-year development plan identified development and production of engines and planes as a major goal.

The technology is difficult to master and China had generally placed heavy reliance on technology from abroad. Over the past four years, engines accounted for 30 per cent of all its imports, according to the Stockholm International Peace Research Institute.

The ARJ21, a Chinese commercial jet that started flying in June, is powered by engines produced by General Electric (GE).

The AECC, which was founded in Beijing, received investment from the State Council, the Beijing Municipal Government, Aviation Industry Corporation of China (AVIC) and Commercial Aircraft Corporation of China, with registered capital of 50 billion yuan (7.5 billion US dollars).

Establishment of the AECC comes as a  strategic move aimed at improvement of the aviation industry. It would boost modernisation of the military, Chinese president Xi Jinping said in a written instruction that was read at the company's founding ceremony.

Despite China's achievements in the science, technology and manufacturing industries, aircraft engines remained one of the few fields in which the country still lagge behind top players.