The two companies signed an agreement in Beijing Wednesday.

Xu Zhanbin, vice-president of China Aviation Industry Corporation II (AVIC II), the parent of Hongdu Aviation, said the order for the 100 new aircraft showed that AVIC II's K-8 was making inroads into overseas markets.

In December 1999, CATIC signed a contract with the Egyptian Defense Department to export 80 K-8 aircraft and its production line.

The K-8 aircraft is designed for both training missions, involving take off, landing, stunt-flying, night and spin flights, and armament operation training.

The K-8 aircraft has already been exported to several countries such as Pakistan, Myanmar and Zambia.

The test flights indicate that the aircraft is an excellent basic trainer with good flight quality and performance, and provides satisfactory training efficiency at low operation and maintenance costs, said Zhang Yanzhong, president of AVIC II.

"We will try our best to make the K-8 aircraft a bestseller by taking feedback from customers and improving the product in accordance with customer needs," he said.

Company sources said several Middle Eastern countries have shown strong interest in the K-8 jet.

Other Southeast Asian and South American countries are also interested in purchasing the aircraft, however sources failed to specify the progress of these potential deals.

To become more competitive in the international market, Hongdu Aviation has decided to invest more to upgrade and improve production.

Founded in 1979, CATIC is a foreign trade joint venture between the China Aviation Industry Corp I and the China Aviation Industry Corp II. It is one of the country's 500 key State-owned companies.

(Xinhua News Agency March 13, 2003)