SAO PAULO, Brazil, Feb 6 (Reuters) - Embraer (EMBR4) (ERJ), the world's fourth-largest producer of commercial aircraft, on Wednesday said it was keen to sell more planes in China but dismissed reports it would open a factory there. Brazilian newspaper O Estado de S. Paulo on Tuesday reported Embraer, one of Brazil's leading exporters, was pushing to set up an assembly plant in China but was running into red tape with local authorities. "There are negotiations to sell more planes," a source at the company said, adding that reports that the firm would add to the commercial office and spare parts distribution unit it operates in the Chinese capital, Beijing, were merely speculation. Executives of the Brazilian regional jet manufacturer have talked repeatedly of a desire to make commercial inroads into China. "China is a market of great potential which we are very interested in and we are following the market with keen interest," Embraer President Mauricio Botelho said recently. The market has also caught the eye of Canada's Bombardier Inc. (BBDb), Embraer's arch rival and opponent in a long-running trade dispute between Brazil and Canada about production subsidies, which is reportedly studying joint ventures to produce aircraft in China. Bombardier, which is also the world's biggest manufacturer of passenger trains, already has several joint ventures with Chinese companies in its rail business. Several aircraft producers, such as Airbus SAS (EAD) (EAD) and Boeing (BA), have parts made in China, but none of the major European or North American civil aircraft manufacturers currently assembles complete aircraft there. Insiders say setting up a plant would depend largely on sales prospects in China. Embraer has sold five 50-seat ERJ-145 regional jets to China's Sichuan Airlines. Sources say it has also been waiting for several months for official Chinese approval to sell 20 ERJ-145s to China Southern Airlines with an option for 10 more. Embraer has declined comment on the deal reports in accordance with company policy of not discussing a deal until it is signed and sealed.