$16b investment aimed at bringing domestic aircraft engines up to speed

China will invest at least 100 billion yuan ($16 billion) in a national research and development project for aircraft engines, according to aviation industry sources.

The State Council is considering a proposal and is likely to approve it in the near future, China Securities Journal quoted an unnamed professor at Beijing University of Aeronautics and Astronautics with knowledge of the project as saying.

The investment will mainly be used for research on technology, designs and materials related to the development and manufacturing of aircraft engines, the professor said.

"Our country remains comparatively weak in almost every field related to the development and production of aircraft engines," the professor said.

"Although we're able to develop a handful of advanced engines, they are still defective and it is difficult to put them into mass production."

Shenyang Liming Aero-Engine and Xi'an Aero-Engine, two research and industrial complexes under the nation's biggest aircraft manufacturer, Aviation Industry Corp of China, will lead the project, with other research institutes participating, including his university, he said.

Brokerage firm Guangda Securities said in a report on Wednesday that China will become the biggest buyer of aircraft and aircraft engines within 20 years and will need around 3,000 aircraft by 2026, Xinhua News Agency reported, adding that this will create demand for around 6,500 aircraft engines worth $65 billion.

China's past failure to pay enough attention to aviation engine research, together with a shortage of skilled workers in industrial manufacturing, has contributed to its long-time inability to develop and produce reliable engines, experts said.

Even the most advanced domestically developed engine - the Liming WS-10 Taihang turbofan engine - fails to apply the cutting-edge techniques of single crystal turbine blades and a powder metallurgy turbine disk, according to aviation industry insiders.

"Developing aviation engines requires a nation to possess solid scientific and technological capabilities and a strong industrial manufacturing sector. Unfortunately, China is comparatively weak in this regard," said Li Fangyong, executive vice-president of AVIC.

Aviation industry analyst Wang Ya'nan said it was not uncommon that an engine's development was hastily launched after the development of a new aircraft began. However, he said he is optimistic about the future.

"As a conservative estimate, we will witness major breakthroughs in the development of indigenous, advanced aircraft engines within at most 10 years."

In addition to investment from the central government, AVIC has set aside 10 billion yuan for a long-term plan spanning until 2030 to develop advanced aviation engines.

That money will be used in the first phase of the three-part plan, which is expected to conclude by 2015.

During the first phase, AVIC will strive to ensure the Chinese air force's aircraft are equipped with better engines and lift the company's development capability to the level of developed economies in the 1980s, said Zhang Jian, deputy general manager of AVIC Engine Holdings.

Li said he hopes the private sector will get involved in the development of aviation engines.

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