China launches $6.5 billion aero engine firm

China has several joint ventures for production of industrial gas turbines. One of its companies recently acquired a minority stake in Ansaldo Energia. The nation has for long targeted development of indigenous gas turbines of its own. Now Chinese news agency Xinhua has quoted China's President Xi Jinping calling for acceleration of independent research, development and manufacturing of aircraft engines and gas turbines to make China an aviation industry power. A state-of-the-art aero engine company will help the nation stay on the cutting edge of gas turbine technology.

China will launch at least 100 key projects over the next 15 years to increase the country's technological capability and improve people's livelihoods, according to the 13th Five-Year Plan unveiled earlier this year. Aviation engines and gas turbines were listed among the top 10 of the 100 projects.

Xi Jinping's words came on the heels of the establishment of the Aero Engine Corporation of China (AECC) Sunday in Beijing.

The founding of the firm is a strategic move that will help enhance national power as well as the capacity of the armed forces, Xi said in a written instruction.

The move will also benefit the reform of state-owned enterprises and the restructuring of the aviation industry, he continued.

The AECC received investment from the State Council, the Beijing Municipal Government, Aviation Industry Corporation of China and Commercial Aircraft Corporation of China, with a registered capital of 50 billion yuan (around 7.5 billion U.S. dollars). The firm has 96,000 employees.

Premier Li Keqiang said in his written instruction that aircraft engines are sophisticated products of the equipment manufacturing industry.Making breakthroughs in this area as soon as possible will have great value for improving China's economic and military power and national strength.

Li urged indigenous innovation to make the AECC a world-class aircraft engine company.