CHINA'S state-asset regulator and aircraft makers are expected to join a consortium to set up the country's first manufacturer of large commercial jets by March, a media report said yesterday.

Local governments and two state-owned metal producers will also invest in the planned venture before the National People's Congress in March, Shanghai Securities Journal reported, citing an unidentified official.

The State-owned Assets Supervision and Administration Commission will inject cash into the company to be the largest shareholder.

China's two large aviation companies, AVIC I and AVIC II, will invest aviation assets and cash in exchange for stakes to become the second largest shareholder of the planned company with equal shares, the source said.

Local governments, including the Shanghai government, are expected to invest five billion yuan in the company but the official refused to say what stakes they will hold.

Shanghai Party Secretary Yu Zhengsheng said last week that the city will play a leading role in research and development, design, parts manufacturing and final assembly of the jets.

Total investment in the project is expected to range between 50 billion yuan (US$6.95 billion) and 60 billion yuan, in which Shanghai will invest in a big way, Yu said.

The source also revealed Baoshan Iron and Steel Co, the nation's largest steel company, and Aluminum Corp of China, the nation's biggest maker of the lightweight metal, are set to hold minority shares in the company.

Aluminum is a key material for aircraft making and holding a stake in the company can make Chalco more competitive as a potential supplier, the official said, adding that the name list is not the final version.

AVIC I built the country's first regional jet ARJ21. The jet will make its maiden flight in March. The project cost six billion yuan and is seen as a precursor to making jumbo jets.

Large aircraft are planes with more than 150 seats or with a payload of more than 100 tons, including military and civilian jets.