Xi'an Aircraft International Corp, a Chinese supplier of parts to Boeing Co and Airbus SAS, has won approval to buy airplane making assets from its parent, as China seeks to develop a plane to rival overseas offerings.

The plan was accepted "in principle" by the Commission of Science Technology and Industry for National Defense, the Xi'an, China-based company said in a Shenzhen stock exchange statement yesterday. The company will buy the assets with stock.

Xi'an Aircraft plans to buy assets including production lines for the ARJ21, China's first regional jet. China is tapping capital markets as it seeks to develop domestic challengers to planes made by Airbus, Boeing and other overseas rivals.