Harbin Aircraft Industry Group Co., Ltd. and Hafei Aviation Industry Co., Ltd., two subsidiaries of AVIC II, will invest with Embraer to establish a company in Harbin to manufacture ERJ145 aircraft.

The joint venture will be capable of annually producing two dozen 30- to 50-seat aircraft and expects to deliver urgently needed aircraft to customers next year.

The 50-seat turbofan aircraft has a range of 3,000 kilometers and a ceiling of 11,000 meters. Chinese airlines have so far placed 30 firm orders plus 10 options.

The new company will provide customers with comparatively low-cost aircraft with low maintenance costs, said a company source.

Sino-Brazilian cooperation on commercial regional aircraft would accelerate the development of the Chinese aviation industry,benefiting both China and Brazil, said Zhang Yanzhong, general manager of AVIC II.

The restructuring and reform of China's aviation industry wouldprovide more opportunities for the development of regional jets. The joint venture would strengthen aviation cooperation between South America and China, said Guan Dongyuan, chief representative of Embraer China.

Chinese airlines have proposed a purchase plan for 90 regional aircraft. It is estimated that in the next 20 years, domestic demand for regional aircraft will exceed 600 and international market demand will surpass 4,000.

AVIC II is a state-owned enterprise responsible for the research and development of transport, general, training and military aircraft and helicopters. AVIC II owns 81 enterprises andhas registered capital of 53 billion yuan (6.7 billion US dollars).

Embraer, the world's fourth largest aircraft manufacturer, entered China in 2000.

(Xinhua News Agency December 3, 2002)