China edged a bit closer to its dream of producing its own commercial jetliner recently when the State-owned Aviation Industry Corp of China (AVIC) opened a joint venture with an American aerospace company.

The joint venture is set up by the AVIC Electromechanical Systems Co (AVIC EM), and Hamilton Sundstrand, one of the world's major aerospace products suppliers.

It will produce the electrical system of the C919 for its manufacturer, the Commercial Aviation Corp of China (COMAC). The C919 is a single-aisle jetliner that can seat up to 168 people, and China's largest passenger jet.

The two signed the agreement in Beijing, last month. They will each hold half the shares of the joint venture, which is backed by a $145 million investment.

The plant will go into operation toward the end of 2012. It is being built in Xi'an, the capital of Shaanxi province and will be responsible for the for C919's electrical generation and distribution system. It is estimated that sales from the project will be worth more than $1.5 billion.

Zhang Xinguo, AVIC's deputy manager, said, "This is the first time in the history of Chinese aviation that such a large joint venture has been established. It reflects the industry's ability to work together with top-notch foreign companies."

The C919's chief designer, Wu Guanghui, says the cooperation will help in sourcing parts globally, a common practice in international aviation. It will also help get China's aircraft industry in the global market.

COMAC plans to sell 2,000 C919s by 2030, Wu said in Hong Kong last month. This could challenge the dominance of Boeing and Airbus in commercial aircraft production. The company already has orders for 100 of the jets.

COMAC unveiled its plans for the C919 in late 2009, and said the plane would make its maiden voyage in 2014, with deliveries beginning in 2016.

AVIC grew out of the merger of China's Aviation Industry Corps I and II. The move was intended to make them more competitive and to pool resources for the large commercial airplane project.

AVIC and COMAC have already cooperated with leading international manufacturers like Boeing, Airbus, Canada's Bombardier, and Brazil's Embraer.

China's rapidly expanding civil aviation market provides plenty of potential for locally produced airliners. It is already developing the ARJ21 regional jet, supported by the US' General Electric and Rockwell Collins.

And, the importance of this rapidly growing market had Airbus opening a production line for its A320 aircraft, in Tianjin in 2009. Embraer is also assembling aircraft in China.

Hamilton Sundstrand is a subsidiary of US' United Technologies Corp and a key supplier of electrical and actuation systems for COMAC's 90-seat ARJ21 jet. It reported $5.6 billion in sales globally last year.

AVIC EM, which has 30 billion yuan in assets, is involved in military aviation, civil aviation, and non-aeronautical defense systems.