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The Boeing Co will set up a maintenance and repair joint venture in Shanghai together with two local partners, which will be the first of its kind outside the United States, its senior executive said yesterday.

Boeing will hold 51 percent in the US$100 million venture. The two Chinese investors in the venture - Shanghai Airport Authority and Shanghai Airlines Co Ltd - haven't yet decided their proportion of the remaining stake.

The maintenance center, which will be located near Pudong International Airport, is expected to begin serving Boeing planes belonging to other airlines in Asia Pacific from 2005.

"The joint venture will provide maintenance and repair service to carriers in the Asia Pacific region. There are many Boeing planes in service," said Kenneth G. Yata, vice president of Boeing China Inc.

Besides maintenance and repair, the center will also help Chinese airlines re-configure their existing passenger aircraft into freighters.

"China's air freight market is growing even faster than its passenger air traffic, so there's a great demand from local plane operators to refit their old passenger aircraft to fly cargoes," said Boeing China spokesman Ma Lixin.

By the end of September, there were 440 Boeing planes serving on China's mainland, accounting for 66 percent of the total commercial fleet in the country. Boeing predicts that China will need around 2,400 new planes in the following 20 years, worth about US$197 billion in total.

To strengthen its ties with China and help boost its sales in the country, Boeing will buy components worth US$800 million in China between this year and 2010.

Chinese planemakers are also interested in partici-pating in Boeing's 7E7, a long-range aircraft dubbed "Dreamliner" that can seat between 200 and 250 people.

"We're currently evaluat-ing their qualifications for entering the 7E7 program," said Yata. "We hope to bring more Chinese partners into the Boeing manufacturing team in addition to the current four to five Chinese factories."

Boeing also rated Shanghai Aviation Industrial Corporation, one of Boeing's Chinese partners, as a Gold-Class supplier for its ability to deliver defect-free products to Boeing.

The us planemaker also approved the company to produce 13 horizontal stabilizers for its Boeing 737 aircraft every month, up from the current 10.

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