BEIJING - CHINA'S main government aircraft company is building a US$1.2 billion (S$1.78 billion) helicopter factory, a state news agency reported on Monday, reflecting Beijing's determination to create a civilian aerospace industry despite a slump in global demand.

Aviation Industry Corp. of China is building the factory in Tianjin, east of Beijing, and should produce its first helicopter this year, the Xinhua News Agency said.

AVIC deputy general manager Fang Yong said China needs about 3,000 helicopters in the next 20 years but has only about 100 civilian craft, Xinhua reported.

The Tianjin factory will include a research and development base, assembly facilities and customer services, Xinhua said, citing Feng Zhijiang, director of the Tianjin Free Trade Zone.

China is pressing head with efforts to develop a civilian aerospace industry despite global economic turmoil that has prompted regulators to tell China's own airlines to cancel or postpone aircraft purchases.

Last week, AVIC obtained a 176 billion yuan (S$38.7 billion) line of credit from a group of 10 government-owned banks to finance product development and other ventures.

AVIC is a co-owner of Commercial Aircraft Corp. of China, the lead company in China's effort to produce large passenger jets to compete with global giants Boeing Co. and Airbus Industrie.

China's first commercial jet, a 90-seat model, had its maiden flight in November. The government says it hopes to produce a 150-seat plane by 2014. -- AP