The Chinese government has confirmedthat it had taken the “importantstrategic decision” to challenge Boeingand Airbus by setting up a state-ownedcompany to build passenger jets, theFinancial Times reported. A statementposted on the government’s web sitesaid the decision to begin researchand development with a view to marketentry reflected “the wish of the entireChinese people for many years”.

It said the decision was made onFebruary 26 but gave no reason fordelaying the announcement, nor didit give a timetable for setting up thecompany or details on how it wouldbe funded.

China is one of the largest targetmarkets for Boeing and Airbus. Accordingto an Airbus projection, Chinarequires 2,929 large aircraft, worthUS$349 billion, between 2006 and2025. It would likely take China decadesto develop a range of jets to mount aproper challenge to the Boeing-Airbusduopoly.

In a statement, the chairman of AirChina welcomed the country’s intentionto build passenger jets to rivalthose of Airbus and Boeing but he didnot commit to buying them.

“It will be a very important milestonefor China’s economy and its (global)influence,” Li Jiaxing said of the planput forward by the State Council lastmonth. However, he did not give detailsof how Air China might be involved.The company has earmarked US$1.4billion for fleet expansion and is set toreceive 13 aircraft from Airbus and 11from Boeing this year. Li observed thatsuccess was dependent on the marketaccepting large Chinese passenger aircraft.“The Chinese people will need toactively want to fly on a Chinese-madebig jet,” he said.