Construction began on Friday on a new helicopter plant in Tianjin whose annual output is expected to account for up to one-fifth of total global production by 2017.

The plant hosts the headquarters, assembly, research and development, sales and service centers of a helicopter company set up in February by Aviation Industry Corp of China (AVIC), the nation's leading aviation manufacturer, and Tianjin municipality.

AVIC General Manager Lin Zuoming said at the launch ceremony that the plant's "annual production capacity of at least 300 helicopters is expected to account for 15 to 20 percent of total global production".

He said it will focus on developing and manufacturing a complete line of helicopters, from light to heavy models, for civilian use.

AVIC was formed in November 2008 from a merger of China's two leading State-owned aviation manufacturers, AVIC I and AVIC II.

With a registered capital of 8 billion yuan ($1.2 billion), the AVIC helicopter company also involves China Helicopter Research and Development Institute, Harbin Aircraft Industry (Group) Co Ltd, Changhe Aircraft Industries Corp and Baoding Propeller Factory.

China's helicopter businesses used to be based in inland regions. AVIC now wants to make use of the geographical advantage of Tianjin as a port city, while the plant can help Tianjin build an aviation industry chain with aircraft manufacturing at the core.

There were only 124 registered helicopters for civilian use in China by the end of 2007, just 2 percent of the average in Western countries. It is widely expected that the helicopter market will take off once low-altitude airspace controls are relaxed as planned in 2010.