ZHUHAI: The Aviation Industry Corporation of China (AVIC) and the Shanghai municipal government have agreed to work together to develop engines for China's large commercial aircraft, it was announced yesterday.

Speaking at the ongoing Zhuhai air show, Tan Ruisong, executive vice-president of the AVIC, said the two sides had signed an agreement for the establishment of a strategic cooperation framework.

The firm will be set up in six months with an initial registered capital of 6 billion yuan ($880 million), he said.