American aviation giant Boeing has started construction of its first overseas facility in the Chinese port city of Zhoushan as part of its plan to produce 737 aircraft.
The construction will consist of two parts - a Boeing 737 completion centre and the delivery centre. It is scheduled to be completed next year.
After completion, the 40-hectare facility will deliver 8 to 10 planes each month, with an annual production of up to 100 aircraft.
Boeing and Chinese aviation manufacturer Commercial Aircraft Corporation of China Ltd (COMAC) will jointly run the completion centre, in which flight entertainment systems and seats will be installed in Boeing's 737 aircraft.
"Today we all see a vibrant, win-win partnership that supports the growth and development of China's aviation industry and the economy, as well as the US economy," Ray Conner, vice chairman of the Boeing Company was quoted as saying by state-run Xinhua news agency.
The completion centre also provides services such as coating, repairs and maintenance of Boeing aircraft.
The 737 delivery centre is solely owned by Boeing.
Boeing and COMAC signed an agreement in October 2016 to set up the plant in Zhoushan in Zhejiang Province, 287 kilometres southeast of Shanghai. The plant is designed to deliver 100 Boeing 737 planes per year.
Boeing supplies 150-200 of "the world's most innovative and fuel-efficient airplanes" to Chinese customers a year, accounting for a quarter of Boeing's global delivery, Conner said, adding that one third of the jets are Boeing 737s.
"The completion and delivery centers will bring 737 MAX closer to Chinese customers, who will take delivery right here in China," he said.
Conner said Chinese companies play a manufacturing role in "every Boeing airplane produced today and on more than 9,000 airplanes flying around the world."
Zhoushan is an archipelago and island city which has the largest fisheries in China and boasts strong shipbuilding, tourism and service industries.
To accommodate aircraft manufacturing, the city's Putuoshan Airport is undergoing a 750 million yuan (USD 108 million) expansion to become an international airport.
In addition to supporting Boeing, the Zhujiajian aviation industry park in Zhoushan will also develop an entire industrial chain for aircraft manufacturing, with the capacity to assemble, deliver and modify 600 aircraft per year by 2025.
Conner also congratulated COMAC for the successful first flight of China's C919 passenger flight and said he was expecting it to offer competition to Boeing and Airbus.