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If the deal goes through, the Shanghai unit will be the second manufacturing line opened by the EU helicopter-making giant in China, where the market's need for the machine is growing by 15 to 20 per cent every year and is expected to become the world's largest over the next two decades. It opened its first production line in Harbin in the 1980s.

Eurocopter, an affiliate of European Aeronautic Defence and Space Company (EADS), also set up a maintenance centre yesterday in Shanghai, partnering with local aircraft leasing company Kingwing, a Shenzhen-based firm.

The maintenance centre was part of the agreement reached in October when Eurocopter sold two EC-135 helicopters to Kingwing for more than 100 million yuan (US$12.8 million).

The two sides will build an assembly line for EC-135 helicopters in Shanghai when the time is right, they said.

"We purchased from Eurocopter because of its wide range of products," Kingwing's President Wang Bei told China Daily yesterday. Kingwing owns four helicopters, which are mainly used for rescue and search, VIP transportation and utility purposes in the city and other areas of the Yangtze River Delta.

Wang said the two sides have laid a solid foundation for co-operation since the pair began contacting each other in July, though the preparation for a new production line may take a long time.

Norbert Ducrot, a senior vice-president for Eurocopter in the Asia-Pacific region, said yesterday the company viewed China as one of the most important markets as "the technology is in place (here)."

"Our strategy is to stay as close as possible to our customers to provide best possible services and the safest aircraft operations," Ducrot said.

Eurocopter and China's only helicopter maker, China Aviation Industry Corporation II, are developing an advanced helicopter, which is expected to make its maiden flight in 2009.

Eurocopter is China's largest foreign partner in manufacturing helicopters and has 50 per cent of the country's civil helicopter market with roughly 70 copters.

Harbin Aviation Industry Group has seen fruitful co-operation with Eurocopter since the early 1980s when the company began to produce Z9 and Z8 helicopters, after purchasing from Eurocopter the production patents for Dauphin and Super Frelon.

China has roughly 300 aircrafts to embark on tasks for general aviation, one of the two categories of civil aviation describing any flight other than a military or scheduled airline flight, compared with 200,000 in the United States.

It is expected China's demand for helicopters will surge in coming years, especially when authorities lift restrictions on low latitude flying.

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