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Aviation, military shares raised by new aircraft engine firm

Xinhua, August 29, 2016 Adjust font size:

Shares in the aviation and military sectors on China's Shanghai and Shenzhen bourses opened higher on Monday, buoyed by the establishment of the Aero Engine Corporation of China (AECC) on Sunday.

Founded in Beijing, the AECC received investment from the State Council, the Beijing Municipal Government, Aviation Industry Corporation of China (AVIC) and Commercial Aircraft Corporation of China, with registered capital of 50 billion yuan (7.5 billion U.S. dollars).

Nearly all aviation technology-related subsidiaries of AVIC opened higher on Monday.

The Shanghai-listed AVIC subsidiary China Avionics Systems Co., Ltd. opened at 20.71 yuan, up 1.84 percent from the previous close. Baosheng Science and Technology Innovation Co., Ltd. opened 0.62 percent higher at 8.13 yuan.

Shares of the Shenzhen-listed AVIC Aircraft Co., Ltd. opened at 23.81 yuan, up 2.31 percent from the previous trading day. AVIC Electromechanical System Co., Ltd. opened 2.44 percent higher at 16.46 yuan.

Other listed military equipment manufacturers also benefited. China Spacesat Co., Ltd. opened at 33.89 yuan, up 1.31 percent from the previous close.

In contrast, Chinese stocks at large opened lower on Monday, with the benchmark Shanghai Composite Index down 0.06 percent to open at 3,068.46 points. The smaller Shenzhen index opened 0.03 percent lower at 10,690.95 points.

Establishment of the AECC is a strategic move that will improve the aviation industry and boost modernization of the military, Chinese President Xi Jinping said in a written instruction that was read at the company's founding ceremony.

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

Despite China having made tremendous achievements in the science, technology and manufacturing industries, aircraft engines remain one of the few fields in which the country still lags behind top players.

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. Endi