Jiangxi province has begun seeking investors, including foreign firms, for the 25 square-kilometre zone with an eye toward breaking ground in two years, Yao Mugen, director of the provincial Development and Reform Commission, told Reuters.
The province will draw on talent from an aviation research institute and two universities plus interest among three local aircraft manufacturers, Yao said.
Output could equal 25 percent of all parts made in China for large Chinese aircraft, he said.
"Jiangxi is now designing a big national aircraft production base drawing on the province's infrastructure and advantages to develop the aviation parts industry," Yao said in an interview.
The 40 billion yuan would cover the zone's infrastructure and equipment for manufacturers, he said.
The province is talking to aircraft manufacturing giant Boeing about an investment in the zone, Yao said. Boeing (BA.N) already makes 747-8 commercial airliner parts in Jiangxi, the company's China spokesman Wang Yukui said.
China, like other countries, is keenly interested in aviation in part because of the large impact airplane exports can have on a nation's balance of trade. [ID:nHKG104281]
Beijing has declared its goal to manufacture large passenger jets with more than 150 seats and freighters capable of handling more than 100 tonnes of cargo, with the explicit aim of taking on Boeing and Airbus (EAD.PA).
(Reporting by Ralph Jennings; Editing by Muralikumar Anantharaman)