Aviation Industry Corp of China (Avic) said it plans to set up a joint venture with the Shanghai government to produce engines for China’s first large commercial aircraft, the South China Morning Post reported. The announcement, made at the Zhuhai Air Show, noted the venture would be launched with US$876 million in registered capital. To date, engine construction has been subcontracted to firms such as Rolls-Royce and General Electric. Avic Executive Vice President Tan Ruisong said the risk and cost of the engine project would be outweighed by the wider benefit of growth in supporting industries. As part of the agreement with the Shanghai government, the city will be the location for the aircraft and engine assembly lines. A feasibility study for the engine program is expected to be finished within six months.