China aviation giant hopeful of aid for engine research

BEIJING Fri Nov 9, 2012 4:32am EST

BEIJING Nov 9 (Reuters) - Aviation Industry Corporation of China (AVIC), the country's dominant military and commercial aviation contractor, is hopeful the government will back a multi-billion dollar plan to build a high-performance engine, its chief said on Friday.

China has failed to build a reliable, high-performance jet engine to end its dependence on Russian and Western makers for equipping its military and commercial aircraft.

"We see it as a major bottleneck preventing us from catching up with international players. So we hope to get all kind of support," AVIC chairman Lin Zuoming, told Reuters on the sidelines of the ruling Communist Party's congress in Beijing.

"I hope the Chinese government will support us. The engine proposal is under study."

China is evaluating a 100 billion yuan ($16 billion) plan to galvanize a disjointed and under-funded engine research effort, aviation industry officials say.

AVIC, a Beijing-based giant, with more than 400,000 employees and 200 subsidiaries including 20 listed companies, has already set aside about 10 billion yuan of its own funds for jet engine development over the next three years.

It has been lobbying hard for extra money, officials familiar with the details say.

China's arms and military equipment industry as a whole has suffered from bans on sales from the United States and Europe imposed after the 1989 Tiananmen crackdown on protests.

Moreover, foreign engine-makers, like General Electric , Snecma, a subsidiary of French aerospace group Safran , Rolls Royce Plc and Pratt & Whitney, a unit of United Technology Corp, have been loath to transfer technology. That has prevented China from taking its usual route to closing a technology gap: copying it.

While AVIC's long-term priority is to develop high-performance engines for military aircraft, it is also trying to design engines for passenger aircraft in the world's fastest growing civil aviation market.

Some Chinese aviation industry specialists forecast that the government will spend up to 300 billion yuan on jet engine development over the next two decades.

In his address to the party congress on Thursday, outgoing President Hu Jintao stressed the importance of science and technology in strengthening state power. He called on the state and enterprises to work closely and use the market to push for innovation.

Hu called for "major science and technology development plans and achieve major technological breakthrough". He did not elaborate.

AVIC, which is aiming to quadruple its sales to one trillion yuan by 2020 from 250 billion yuan in 2011, has been pouring resources into aviation research, but engine development remains its most challenging task.

"We have seen rapid development of aviation technology, but there is still a big gap with international players in engine technology," Lin said.

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