Beijing, May 11 (IANS): American multinational corporation Boeing has begun construction of its new plant in China, according to authorities on Thursday.

The government of Zhoushan, 287 km southeast of Shanghai, said in a statement that a ceremony was held on Wednesday to mark the beginning of the construction work of the facility, which plans to deliver the first batch of aircraft by the end of 2018, Efe news reported.

President and CEO of Boeing Commercial Airplanes Raymond Connor, who attended the ceremony, said it was a step forward in having the company's presence in China and an important collaboration in the aviation sector between the two countries.

He added the new plant is a milestone in US-China collaboration in the field of technology, and said it will be an important economic boost for the area as several local suppliers would also set up shop near the Boeing plant.

Boeing is building the plant in collaboration with China's state-owned Commercial Aircraft Corporation of China (COMAC).

The plant will comprise two parts: a B737 completion centre, a joint venture between Boeing and Comac, and a B737 delivery centre, solely owned by Boeing. It will provide services such as Boeing aircraft maintenance and fitting of seats, as well as designing the interiors of Boeing's 737 MAX series aircrafts.

The plant is designed to manufacture eight to 10 aircraft per month amounting to a total of 100 aircraft per year.

Zhoushan is considered the financial capital of China where COMAC has set up its aircraft design, manufacturing and testing centres.

Last week, China unveiled its first mid-size indigenous passenger aircraft -- C919 -- which might offer direct competition to the Boeing 737 in the future.