A faster way for China to make its way in helicopter manufacturing is to build foreign types in facilities supervised and approved by foreign airworthiness authorities. While license production or assembly may no longer hold much interest for Avicopter, a private company in Chengdu wants to do just that. Talks between Chongqing Helicopter Investment and AgustaWestland have been suspended, however, says Fulvio Maurogiovanni, the Italian company's senior vice president for China.

AgustaWestland and Chongqing Helicopter last year proposed joint assembly of an unnamed helicopter at the site that the Chinese company had acquired for its planned manufacturing base.

But Maurogiovanni says AgustaWestland is unable to meet the ambitions of the Chongqing company. Chongqing Helicopter wants to assemble an AgustaWestland type to market domestically and internationally, and it wants to assemble or build helicopters for other manufacturers, too.

Apart from those sticking points, a deal was quite close when the two parties stopped discussions, he says, adding that he is impressed by the Chinese company's determination to get into the helicopter business

“We are not closing the door because we think Chongqing is a market that allows good penetration [of the national market] and Chongqing is itself growing,” says Maurogiovanni. “But we cannot compromise on those two points.”

Chongqing Helicopter was set up in January 2011 with registered assets of 3.3 billion yuan ($528 million), 130 hectares (320 acres) of development land and backing from the government of Chongqing, which is nominally a city but actually a small province with a big urban area and a population of 30 million. AgustaWestland has envisaged an operation there that would at first assemble major modules and gradually move to more complex manufacturing processes.

The proposal is remarkable because it might turn out the largest aircraft to be privately assembled in China—that is, without the involvement of Avic.

“I would just love to do something in China without Avic,” says a Western industry executive who has long experience in working with the group and thinks a private partner would be much more efficient, providing it could find skilled staff. Avic and state commercial aircraft builder Comac employ the great majority of Chinese aircraft manufacturing personnel.

The opportunity to try manufacturing or assembly of aircraft in China without Avic may not be available at Chongqing, however. Two industry executives say Avic may become involved in Chongqing Helicopter. According to one, Chongqing Helicopter has always wanted some association with the state group, presumably to gain access to skilled workers and managers and political clout.

Avic is trying hard to improve its efficiency, but Western executives—many from enormous companies that are hardly free of bureaucracy—express frustration at the slow decision-making and management infighting of the state group. Officials in Western companies are also sure that a private partner would use labor and capital much more efficiently, driving down costs.