SHANGHAI, May 12 – China inaugurated its first ever jumbo passenger aircraft company in Shanghai on Sunday.

The company, named Commercial Aircraft Corporation of China Ltd (CACC), will be responsible for researching, developing, manufacturing and marketing large passenger aircraft.

The aviation industry throughout Asia is expected to expand dramatically in the next 10 years. Currently, the industry supports 10.5 million jobs in the Asia Pacific region according to The Hindu. That figure is only going to go up, with over 16,000 new aircraft required to meet demand by 2020.

The CACC has a registered capital of RMB19 billion. The State-owned Assets Supervision and Administration Commission – the new venture’s biggest shareholder – invested RMB6 billion Xinhua reported.

Speaking in Beijing on Sunday, Chinese Premier Wen Jiabao said that China should adhere to self-innovation in research and development of large aircraft.

“On one hand, we should notice that China is far behind the world advanced level in harddware, software and talent; on the other hand, China has certain conditions including economic strength, industrial foundation, demand from the market and opening up degree,” Wen said.

Shareholders of the new company also include China Aviation Industry Corporation I, the country’s largest aircraft producer, and China Aviation Industry Corporation II.

Zhang Qingwei, minister of then State Commission of Science, Technology and Industry for National Defense, was appointed as the company’s board chairman.

Establishment of the company was approved in February 2007 by the State Council, China’s Cabinet. This was to make the country capable of building aircraft with a take-off weight of more than 100 tons, or planes with more than 150 seats.

Meeting the demand to equipment is not the only problem China’s aviation industry will face in the coming years. All of China’s big carriers have been hampered by a lack of trained pilots, as well as growing legion of disgruntled ones, dissatisfied with lifetime contracts that force them to work their entire careers for one airline.

China’s new venture into aviation will have to work through this minefield of problems before the CACC can hope to gain a profit.