TIANJIN, China - AT THE sprawling site of the first Airbus aircraft assembly plant outside Europe, a bright red banner and two cheerless billboards offer the only clues of what is to come.
'Focus on quality, reduce costs and ensure that the first A-320 plane is assembled on time,' exhorts the banner, hung on a fence encircling the construction site at north-eastern Tianjin's airport industrial park.
Those modest goals belie the true significance of the 2 billion yuan (S$392 million) factory.
When completed by year-end, it will mark a new milestone in China's growing sophistication as a global manufacturer, graduating from the making of toys and shoes to passenger jets.
The first made-in-Tianjin A-320 - a single-aisle, 150-seat aircraft popular with Chinese airlines - is expected to roll off the assembly line as early as next year.
By 2011, four such aircraft are expected to be built every month.
And China will move nearer to its long-held dream of building its own large passenger plane.
It has been making aircraft component parts for industry giants Boeing and Airbus for years.
But the Airbus plant will finally offer Chinese engineers a complete factory-floor view of how the entire complex operation comes together.
Beijing declared last month that it wants to design and build a homegrown passenger jet, possibly by 2020, which can compete with Boeing and Airbus.
'Developing its own large aircraft is a priority of China's longer-term scientific and technological development strategy,' the official Xinhua news agency declared last month. 'The programme is a major strategic decision of the central government, and a long-cherished aspiration of the Chinese people.'
The details remain sketchy, though media reports and analysts suggest that China would first aim to build a single-aisle, 150-seat passenger jet - the same cabin layout as an A-320 - before attempting something larger.
Beijing is expected to invest an initial 50 billion yuan to 60 billion yuan in the project, which includes a parallel plan to develop a military passenger jet.
After sucking in manufacturing jobs worldwide, is China poised to eat Airbus and Boeing's lunch next?
Not just yet, say analysts and industry players, who have greeted the news with a mixture of diplomacy and scepticism.
Mr David Carcaillet, a director of project marketing at Airbus who is based at its Toulouse headquarters in France, said it is one thing for China to say it wants to build its own aircraft, and another to actually do it.
Speaking to The Straits Times while in Hong Kong recently, he cited the Japanese as an example.
'They have tried to set up their own aviation industry since the 1950s and are still not getting anywhere,' he said.
'It is still too early to see how significant a challenge China could be to the dominant players of Airbus and Boeing, but China would need to raise its technical expertise and knowledge by a fair amount in order to have any chance of succeeding.'
Analysts said that learning how to build a modern passenger plane may just be the easy part for China.
The tougher challenge is likely to be in marketing the new aircraft and convincing potential buyers that China is able to provide the same level of service support that airlines worldwide expect from Boeing and Airbus.
'The sheer number of capabilities that must be mastered, combined with the need for commercial profitability, generally means that a civilian aviation sector is more demanding in time, intellectual capital and resources than developing a space programme,' private intelligence consultancy Stratfor said in a recent report.
It reckoned that China will not be a serious threat to Boeing and Airbus for the next 20 years at least, though it acknowledged that Beijing had several major advantages going its way.
For one, it is now flush with cash and eager to channel the money towards strategic sectors like aviation.
Second, the tremendous growth in domestic air travel provides a powerful financial impetus. Industry and government studies estimated that Chinese airlines will need about 1,200 to 2,230 new passenger planes over the next 15 years.
Third, China is not starting from scratch and knows full well the difficulties involved.
Between 1970 and 1997, Beijing launched two attempts at building its own large passenger jet, which ended in failure after a host of technical, funding and political problems.
The first project, which produced three prototypes dubbed 'Yun 10', fell apart in 1985 amid a shortage of funds and lack of interest among Chinese airlines.
A second attempt faltered in 1997 after Beijing's foreign partners refused to share crucial aviation technology.
Aviation expert Zhou Jisheng, an industry veteran who was involved in the 'Yun 10' project, is convinced that Beijing has learnt its lessons from the two failed attempts.
The crucial difference this time, he told The Straits Times, is that the project will no longer be monopolised by government agencies and state-owned companies, and it will adopt a market-oriented approach.
Ever since the government announced that it would set up a joint stock company to lead the venture, speculation has been rife that Beijing would allow the private sector to invest in the airliner plan.
State media also reported two weeks ago that the government is likely to invite foreign partners to 'invest and co-develop components and products, and share the profits and risks'.
Mr Zhou said: 'The passenger jet is a commercial product that must be viable and competitive in the market. So we will need a market-oriented approach if we hope to succeed.'
An early litmus test will be the launch of China's first homemade mid-size regional jet, the ARJ-21, next year.
Engineers in Shanghai began assembling and testing the 70- to 110-seat jet last week, and expect its maiden flight to take place next March. Chinese airlines are said to have already placed 71 orders for the plane.
'I think foreign analysts underestimate China's capability,' said Mr Zhou.
'I cannot say they are entirely wrong, but if we do not try just because we are afraid of making mistakes, then we will never make progress.'
ADDITIONAL REPORTING BY VINCE CHONG IN HONG KONG
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