(Yicai Global) Feb. 19 -- Chinese chemicals maker Hongda Xingye Group and the Beijing Aerospace Testing Technology Research Institute are teaming up to make liquid hydrogen for fuel cell vehicles.

Guangdong-based Hongda Xingye will build a production facility in Wuhai in the Inner Mongolia Autonomous Region, it said in a statement yesterday. The research institute, which is China's largest liquid hydrogen producer and hoarder, will supply the liquefaction technology and the pair plan to sell their output to Hongda Xingye's home province, the statement added.

Some of China's top cities are set to begin rolling out pilot projects offering subsidies for fuel cell vehicles in the near future, state-backed China Securities Journal reported last month, citing an anonymous but authoritative source. Months earlier, Ministry of Industry and Information Technology official Qu Guochun had said next steps for the sector would be promoting the technology at a local government level.

Hydrogen fuel cell vehicles boast a higher energy density over lithium battery-powered new-energy vehicles, meaning they provide a longer range. They can also refuel more quickly.

The cooperation is in line with the Chinese government's policy for developing new energies, Hongda Xingye said, adding that this will help the company fill out the entire industry chain, offering liquid hydrogen production, storage, transport and applications.

Hongda and the institute, which runs China's largest experimental research base for aerospace power and provides fuel for the country's carrier rockets, also plan to build several hydrogen stations and work together to research and develop related equipment, the statement added.

Editor: James Boynton