MELBOURNE, Australia—China has set up a specialist aero-engine maker with the aim of promoting economic development and strengthening its armed forces. The new group, Aero Engine Corp. of China (AECC), has been separated from aeronautics conglomerate Avic, which will now concentrate on airframes, onboard systems and various activities with little or no relationship to aviation. Avic will be a shareholder in AECC, however, as will Comac, the commercial-aircraft builder that was split ...

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