Chinese investors last week signed a “framework agreement” with Russia’s ministry for development of eastern regions (MinVostokRazvitia) to establish a new assembly line in the Russian city of Komsomolsk-upon-Amur for Xian Aircraft’s MA-60 turboprop. Timed to coincide with Russian president Vladimir Putin’s September 2-3 visit to Beijing, the deal involves a partnership between Xian Aircraft and the Jiangsu Baoli International Investment company to help fund the production of 50 aircraft a year.

“This aircraft is oriented for export into sixteen countries, including Russia,” said Alexander Galushka, Russia’s minister for eastern development. Plans call for building a production line in the TOR Komsomolsk industrial zone. The Chinese investors–represented in Beijing by Xian chairman Fang Yunfeng and Jiangsu Baoli president Zhou Dehong–expect to spend $100 million on the project.  According to Zhou, the project calls for two phases of development, the first involving final assembly and then for gradual localization of parts production.

The MA-60 “Modern Ark” is a regional turboprop based on the 48-seat Antonov An-24, whose more than one-thousand-unit production run ended in 1979. Since 2000, Xian has assembled about 80 Modern Arks, including a handful of 60-seat MA-600s powered by Pratt&Whitney PW127J engines and featuring Rockwell Collins Pro Line 21 avionics. The Chinese investors believe ailing Russian airlines could affordably replace their outdated An-24/26s with MA-60s.  “The decrease in the value of the ruble to other currencies has led to notable changes in the economic conditions in Russia, making them more favorable to foreign investors,” minister Galushka said. Officials see the MA-60 as an alternative to the now stalled Rostec-Bombardier plan to build Q400s turboprops in Russia, following the imposition of Canadian sanctions over Russia’s annexation of Crimea and alleged military support of Ukrainian separatists. Russian aerospace conglomerate UAC has urged the Kremlin to provide funds for the 64-seat Ilyushin Il-114-300, but the treasury now finds itself short of cash as a result of the economic slump in Russia.

Meanwhile, the inability of the Russian industry to produce competitive turboprops in sufficient numbers has encouraged Chinese manufacturers to develop competing products aimed at a market expected to generate a demand for 400 units. At the recent MAKS’2015 air show in Moscow, the 19-seat Xian Y-12F, powered by P&WC PT6A-65B turboprops, flew daily, and its manufacturer appointed FlyAvia an official dealer in Russia and CIS. China’s AVIC also displayed a mockup of the new MA-700, a 78- to 86-seat turboprop described as a “100 percent new development.”