China’s aircraft industry is composed of the subsidiary companies of AVIC I and AVIC II, and several private aircraft manufacturing companies. And AVIC I, II’s subsidiaries predominate the market. The famous subsidiaries include AVIC I Xi’an Aircraft Industry (Group) Co. Ltd., AVIC I Shenyang Aircraft Industry (Group) Co. Ltd., AVIC I Chengdu Aircraft Industry (Group) Co. Ltd., and AVIC II Shaanxi Aircraft Industry (Group) Co. Ltd., AVIC II Jiangxi Hongdu Aviation Industry (Group) Co. Ltd., AVIC II Harbin Aircraft Industrial Group. AVIC I manufactures the ARJ 21, China's indigenously developed regional jet with 70-100 seats, and the 50-seater turboprop MA60. AVIC II is the country's only manufacturer of military and commercial helicopters. It also manufactures the 50-seater ERJ 145 regional jet in partnership with Brazilian plane maker Embraer.

Currently, only the United States, Russia, France, Germany, Britain and Spain have the ability to build large aircraft, with Boeing and Airbus taking the lion's share of the international market. China plans to produce a homegrown passenger jet with at least 150 seats to challenge the domination of Boeing and Airbus in the country's fast-growing aviation market.

The rapid economic growth expands the space for the development of aircraft industry. It is a key period for Chinese aircraft industry in next five years. The home-made regional ARJ21 aircraft rolls out and enters into the market. The government has put the project in its 11th Five-Year Plan (2006-10), along with moon exploration and manned spaceflight. In order to strengthen the country's aviation manufacturing capabilities, the State Commission of Science, Technology and Industry for National Defense is working on the restructuring plan of AVIC I and AVIC II, which will await approval from the State Council and the National People's Congress. It is predicated to complete the restructuring in March.

The businesses of AVIC I and AVIC II, the country's two leading State-owned aviation manufacturers, are likely to be restructured and consolidated to realize the country's ambitious plan of developing a homegrown large commercial aircraft. The move is aimed at "strengthening the country's aviation manufacturing capabilities" and "pooling resources to carry out the large commercial airplane project".

The trend of aircraft industry is to subcontract more and more production by the global main aircraft manufacturers. It is predicated that the subcontract scale in next 20 years will reach 11.48 million-trillion U.S. dollars and the annual subcontract scale is close to 60 billion U.S. dollars. In recent years, China has broken some key technologies in aircraft industry. It is predicated that domestic aircraft industry will gain more and more subcontract orders.

With the rapid development of the economy, the helicopter is using much wider in public utility. It is predicated by the experts that the market needs for civil helicopter in China will reach to 2763 in next 20 years.

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