The Chinese government has given the formal go-ahead for an assembly plant for Airbus A320 narrow-body airliners to be built in the northern port city of Tianjin, the official Xinhua news agency said on Thursday.

It gave no further details in the brief report, sourced to the Tianjin branch of the powerful planning department, the National Development and Reform Commission.

French Transport Minister Dominique Perben said last month that he believed Beijing had agreed to the factory being located in Tianjin, which is about an hour's drive from the capital.

Tianjin had been competing for the plant with Shanghai, Xian in the northwest and Zhuhai in the south.

Airbus hopes a local plant will give it an edge over rival Boeing as they compete to meet a projected surge in Chinese demand for short-haul aircraft over the next 10 to 20 years.

Airbus and French officials have said China is likely to take a 5 to 10 percent stake in a program to replace the A320.

EADS co-Chief Executive Thomas Enders was quoted by Germany's Focus magazine in April as saying China could start building A320 family aircraft at the end of 2008 with the first deliveries as early as 2010.

The plant would have the capacity to produce up to four planes a month.

Assembly typically accounts for a small minority of aircraft production costs. Airbus first builds wings and much of its fuselages at separate sites, mostly in Germany, Britain and France, and then assembles them into the final aircraft at Toulouse and Hamburg.

And all aircraft makers receive complete engines from engine companies, basically ready to bolt on.

The A320 family comprises the A318, A319, A320 and A321, with seating from about 100 to 200.