China sets up defence branch of Aviation Industry Corporation of China

China’s biggest aircraft maker sets up defence aviation branch

The Aviation Industry Corporation of China (AVIC), the largest aircraft manufacturer in China, has set up an independent defence aviation branch aimed at producing state-of the-art military hardware mainly for markets worldwide.

China’s official news agency Xinhua said that the establishment of the defence aviation branch – costing about 50 billion yuan (US $7.35 billion) and formed by the integration of relevant departments within the AVIC – would be an independent accounting unit of Aviation Industry Corporation of China.

The defence branch was formed with the intention of separating the civilian and defence operations of the AVIC.

However, the news agency did not say what the formal name of the defence aviation branch was.

The Aviation Industry Corporation of China employs about 60,000 people, has annual sales revenue amounting to 30 billion yuan (US $4.4 billion), and has exported over 1,000 aircraft overseas and also cooperated with aviation manufacturers abroad to develop civilian planes, Xinhua said.

The new defence branch would take over most of the defence business of the AVIC and supervise 10 aircraft assembly plants and research institutes located across China, having combined assets worth 50 billion yuan ($7.3 billion, Xinhua quoted Wang Yawei, general manager of the defence branch of the Aviation Industry Corporation of China, as saying.

China, added Wang, was trying to become a world leader in the supply of defence products by expanding the country’s overseas market for export.

The AVIC’s defence branch would have as its “core task” making combat aircraft, including China’s home-grown, third-generation fighter jet called the J-10, according to Wang Yawei.

At the same time, the defence aviation branch which will continue to produce AVIC’s L-15 Falcon, the supersonic training aircraft, and the FC-1 Fierce Dragon, the light-weight multipurpose fighter, which is meant for export.

The other tasks of the AVIC’s defence aviation branch include developing and manufacturing training aircraft and unmanned aerial vehicles, conducting research, making business jets as well as selling its products globally, a statement issued by the Aviation Industry Corporation of China said.

In 1999, the Chinese government had split the state-owned AVIC into AVIC I and AVIC II in a bid to make it “more competitive” in the global aviation market.

However, the government merged the two parts in November 2008 with a view to forming an aviation giant.

The Aviation Industry Corporation of China now owns 22 listed companies in China, according to Xinhua.