Nation seeks own piece of the market and less reliance on global aircraft makers The mainland took a bold step on its long march to build its own jumbo jet with the formal inauguration of China Commercial Aircraft yesterday. After the failure of a previous attempt to build a larger passenger aircraft in the 1970s, the new company - whose key shareholders include the State-owned Assets Supervision and Administration Commission and aircraft makers China Aviation Industry Corp I (Avic I) and China Aviation Industry Corp II (Avic II) - was established in Shanghai with registered capital of 19 billion yuan (HK$21.19 billion). The formation of China Commercial Aircraft is the reawakening of a government ambition to gain a foothold in the industry because the building of jumbo jets can speed up technological advances in the sector and reduce reliance on the key global aircraft makers - Boeing and Airbus, according to analysts. It will also meet growing demand from the country's huge market for large civil aircraft. China is likely to become the largest market in the world for new large civil aircraft, with manufacturers expecting to sell 100 jumbo-sized aircraft per year in the mainland market for the next 20 years, or one aircraft every three to four days, according to a report by the US International Trade Commission. The market is estimated to be worth up to US$350 billion. Driving the demand is rapidly increasing domestic passenger and freight needs because of robust growth in the mainland economy over the past decade, researcher Peder Andersen wrote in the report. From 1997 to 2006, China ordered 959 large civil aircraft, accounting for 9.1 per cent of global orders. Looking at the numbers, the central government wants a piece of that market share, according to Liu Xiahui, an economist at the China Academy of Social Sciences. 'As China's economy has been growing in the past few years, we have the capacity to invest more capital on research and development in this industry,' Mr Liu said. 'Establishing a jumbo jet is a capital and technology-intensive business.' More than 50 billion yuan will be required for research, analysts say. The development plan was brought up in 2006 when Premier Wen Jiabao said the mainland would be producing jumbo aircraft before the end of the 11th Five-Year Programme (2006 to 2010). In March last year, Mr Wen approved a plan to form a joint-stock company that would be responsible for the aircraft's production. The goal is to produce a large transport aircraft for civil and military purposes by 2015, with entry into civilian service by 2020. This was the first time the idea has been highlighted after the plan was halted in 1980s. China's dream of building its own jumbo jets started in 1970, just two years after Europe's Airbus went into production. The 'Yunshi' successfully took off on its maiden flight in 1980. However, only two prototypes were built and the project was halted because of technological obstacles and financial difficulties. China Commercial Aircraft general manager Jin Zhuanglong yesterday told Xinhua that there was no timetable for the country's latest effort to take to the skies. Meanwhile, analysts expressed scepticism about the commercial prospects of a large jet designed and manufactured entirely in China, given its limited experience in making big aircraft and shortage of homegrown talent. It is widely believed that the mainland will not see its own jumbo jet in the next 10 years. Mr Andersen said the mainland's plan posed few short-term competitive threats for either Airbus or Boeing. However, he added that in the next 15 years, China's stated goal of producing its own large civil aircraft would greatly affect the market. 'Should China realise success in this endeavour, it is likely that domestically produced large civil aircraft will take the place of foreign-built large civil aircraft to some extent,' Mr Andersen said.