Russia-China Venture to Build Aircraft Plant in Inner Mongolia

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Feb. 17 – A joint Russian-Chinese venture will invest US$1.27 billion towards the construction of an aircraft factory in the town of Ordos located in China’s Inner Mongolia Autonomous Region, Xinhua reported yesterday citing a company agreement.

Construction on the plant will begin later this year and it will eventually be equipped to assemble small general aviation aircraft.

China Oriental Sciences Group will hold 52 percent of the venture, China-Russia International Investment Co. will hold 38 percent, and Russian aircraft designer “Modern Aircraft Technology” will hold 10 percent, Xinhua said.

“By 2016, when the plant leaves at full capacity, it will be collected 400 4-12-seat general aviation aircraft, at the beginning of 2013 the first aircraft will be built,” Xinhua quoted the President of China Oriental Sciences Group Jung Chuang as saying.

According to Jung Chuang, the market for general aviation aircraft in China is developing and there is great demand for aircraft of this type.

Earlier this year, Jilin-based Dingxin Technology and the Moscow-based State University of Aerospace Technologies agreed to launch a private airplane production project in northeast China’s Jilin Province.

The cooperative venture, with a total investment of US$106 million, is expected to produce 500 two-seat and four-seat light aircraft and seaplanes for private use every year with an estimated revenue of RMB800 million.

The Chinese company will hold 60 percent and the remaining 40 percent will belong to the institute. It will be located in the Jilin Municipal Economic Development Zone nearly 100 kilometers east of the provincial capital Changchun.

Alexander Matveenko, head of the Moscow Aviation Institute, said the planes are likely to enter the northeast Asian market after the project is put into operation.

At the same time, small airplanes have the small problem of where the planes will fly in China. As matters stand, the control of air space means that general aviation has little room in which to maneuver.

Last year, the Head of China’s Department of Civil Aviation Li Jiaxiang promised that by 2015 the country will fully open low-altitude airspace.

This, according to Jung Chuang, will spur on the development of the general aviation aircraft market in China.

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