March 16, 2011 / 7:06 PM / 8 years ago

UPDATE 1-Embraer could make business jets in China-report

* Report says Brazil, China in talks over Embraer plant

* Embraer watching negotiations for now (Adds company comment in sixth paragraph)

SAO PAULO, March 16 (Reuters) - Embraer (EMBR3.SA)(ERJ.N), the world’s biggest maker of regional aircraft, could make business jets at its idled plant in China, the newspaper O Estado de S.Paulo reported on Wednesday.

The Brazilian government is negotiating with Chinese officials to secure the authorization the company needs to start production of the smaller, pricier aircraft, the newspaper said, citing an unnamed government source.

The source said the talks were “well underway,” but added that the Chinese government has not approved any deal yet. Brazil wants the announcement to come during the visit of President Dilma Rousseff to the Asian giant April 9-16.

Embraer previously considered closing its manufacturing facility in northern China after expected plane orders did not come through and the Chinese government created a state-run company to produce mid-sized aircraft. The Chinese government sees Embraer as a direct competitor to its company, known as Comac, Estado reported.

Brazil and China are two of the emerging world’s biggest economies. While the two have moved closer in recent years, with China surpassing the United States as Brazil’s main trading partner, the relationship has not always been easy, with the two heavyweights jockeying for global influence.

A spokesman for Embraer, which is based in the Brazilian city of Sao Jose dos Campos, said the company is awaiting the outcome of the negotiations between the two governments but otherwise had no comment. (Reporting by Luciana Lopez; Editing by Guillermo Parra-Bernal; editing by John Wallace, Dave Zimmerman)

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