Nov. 28 (Bloomberg) -- Textron Inc.'s Cessna unit, the world's biggest maker of business jets, will build its latest aircraft exclusively in China to cut costs, the first plane the 70-year-old company will manufacture outside of Kansas.

Cessna's new 162 SkyCatcher light sport aircraft will be assembled by China's Shenyang Aircraft Corp., Textron said in a statement. The $109,500 plane, which has 900 orders, will be made in the northeastern city of Shenyang, said Chen Yongman, senior vice president of the Chinese company.

Cessna has boosted sales in China as the country's growth rate of at least 11 percent makes private jets, yachts and other luxury goods affordable to more people. Aircraft manufacturers, including Airbus SAS, are also moving some production to Asia's second-largest economy to cut costs and woo Chinese customers.

``The key to achieving 900 orders within four months of announcing the model is the aircraft's affordability,'' said Jack Pelton, chairman and chief executive officer of Cessna, in a video speech today in Beijing. ``The key to achieving that price point is our partnership with Shenyang Aircraft.''

The model, a two-person recreational aircraft, was unveiled in July 2006. Cessna said it expects to build as many as 700 SkyCatchers a year and deliver the first in late 2009.

Until now, Cessna has built its aircraft in Independence and Wichita, Kansas, where the unit is based, said Cessna spokeswoman Pia Bergqvist.

Textron, which also makes Bell helicopters, rose $2.44 to $68.28 in New York Stock Exchange composite trading at 4 p.m. The shares have risen 46 percent this year.

Cheaper Wages

Shenyang Aircraft, a unit of state-owned China Aviation Industry Corp. I, known as AVIC-I, pays workers about 3,500 yuan ($473) a month on average, according to the company. Cessna's average wage is about $20 dollars an hour, according to Jim Walters, senior vice president of the company.

The Chinese government is working to develop a domestic aerospace industry with companies including AVIC-I, which has plans to build a 150-seat plane to compete with Boeing Co. and Airbus.

Airbus SAS, the world's biggest planemaker, is building a factory in Tianjin, eastern China, as it seeks to win more orders in China. Empresa Brasileira de Aeronautica SA of Brazil has a production base in Harbin.

Boeing, which has no plans to assemble aircraft in China, has contracts with Chinese part suppliers valued at more than $2.5 billion.

Biggest Unit

Cessna is Textron's biggest unit, with $4.2 billion in sales in 2006. The unit's models include Citation business jets, Caravan turboprops and single-engine SkyCatcher planes. Textron's third-quarter profit rose 38 percent after it delivered more aircraft.

Order backlog at Cessna stood at a record $11.9 billion at the end of the third quarter helped by demand from international customers. The unit will get more than half its sales from outside the U.S. this year, Pelton said Sept. 24. North America accounted for 70 percent of sales in 2005.

AVIC I plans to make business jets that feature less than 20 seats starting in 2015 as part of its efforts to turn itself into a commercial aircraft manufacturer, Zheng Qiang, senior vice president of the Chinese company said today.

It also builds military jets such as the new J-10 fighter and commercial planes including the 50-seat MA60 and 75-to 90- seat ARJ21. It sells the MA60 to local airlines and in developing countries.

`A Major Transition'

``We are in the middle of a major transition to make civil commercial aircraft as our core business,'' Zheng said.

The number of billionaires in China, the world's most populous nation, rose to 106 this year from 15 last year, according to the Shanghai-based Hurun Report.

Asia is likely to be the fastest-growing region worldwide for business aviation, according to Honeywell International Inc., the world's largest maker of aircraft controls. Flight hours may rise 12 percent a year until 2016, according to the company's 2007 business aviation outlook.

To contact the reporter on this story: Tian Ying in Beijing on ytian@bloomberg.net; Kyunghee Park in Hong Kong at kpark3@bloomberg.net.

Last Updated: November 28, 2007 16:19 EST