China made the first two senior appointments for a new company focusing on aircraft engines ahead of its annual parliamentary meetings, pushing forward with a merger that aims to achieve a long-standing goal of creating a locally made jet engine.
Cao Jianguo was named chairman and party secretary of the new company, whose Chinese name translates directly as China Aircraft Engine Group, while Li Fangyong was appointed general manager and deputy party secretary, according to a
statement Thursday on the Aviation Industry Corp. of China website. Both Cao and Li were former AVIC executives.
China plans to merge more than 40 entities working on plane engines into a group with 145 billion yuan ($22 billion) in assets as part of a broader push into advanced industries to propel its economy, Bloomberg reported Jan. 19, citing people familiar with the proposal. No other details of the plan were released Thursday.
The Made in China 2025 blueprint, released last March, cited aerospace as one sector that can help China develop into an advanced economy along the lines of Japan and Germany.
New Controller
The new company will control at least three listed companies. AVIC Aviation Engine Corp, Sichuan Chengfa Aero-Science & Technology Co. and AVIC Aero-Engine Controls Co. said in separate filings to the Shanghai and Shenzhen exchanges that China Aircraft Engine Group will be their “defacto controller.”
Shanghai-based Commercial Aircraft Corp. of China is developing the C919 single-aisle jet, which is expected to make its first test flight this year. CFM International, a joint venture between GE Aviation and a division of France’s Safran SA, will supply a version of its LEAP engine for the initial C919s.
The air-engine plan, which Bloomberg first reported in October, is part of a government effort to streamline the state-owned sector while creating globally competitive companies. Last year the government merged two leading rail-equipment companies and announced a plan to reorganize two major shipping groups. China also plans to combine some assets of its three biggest airlines, a person familiar with the proposal said last October.
China’s annual political meetings begin this week in Beijing, with the national committee of the Chinese People’s Political Consultative Conference meeting Thursday afternoon. The National People’s Congress meets Saturday, with delegates slated to present economic targets and sign off on a new five-year plan for the economy.
