Beijing reportedly has approved a joint venture between China Aviation Industry Corp II (Avic 2) and Brazil's Embraer to manufacture regional jets in China. The proposed partnership will be located in Harbin in the northern province of Heilongjiang, according to a mainland newspaper. The venture was expected to produce a version of Embraer's ERJ-145 50-seat regional jet, an aircraft type that is also under consideration by Dragonair, to be the workhorse of its proposed fleet of smaller jets to service third-tier mainland cities, the official China Daily reported yesterday. The report said Mauricio Botelho, president of Embraer, the world's fourth-largest commercial aircraft manufacturer, expected to seal the agreement by the end of this year. The new company was expected to make its first delivery within 18 months of the contract being signed, it said. The speed at which manufacturing would commence implies that the partnership will principally be reassembling knockdown kits of the Brazilian plane and that little component manufacturing will take place in China, at least in the short term. However, one of China's biggest immediate needs is for technology transfer in order to give its aircraft manufacturing industry insight into replacing ageing designs. China Aviation Industry Corp I (Avic 1), produces the 50-seat Y-7 and the 60-seat MA60 models. Both are turboprop aircraft rather than jets, and the Y-7 is generally regarded as unreliable by airlines. Embraer estimates China will require 550 aircraft with up to 120 seats in the next 20 years. It is still awaiting Beijing's approval for an order of 30 aircraft by mainland airlines last year.