Major state-owned Chinese firms, including the parent group of Aluminum Corp of China Ltd (Chalco), will invest in a government-led project to develop large passenger and cargo jets, a source familiar with the situation said on Tuesday.
Aluminum Corp of China, or Chinalco, the world's fourth-largest aluminium producer, plans to invest 1 billion yuan ($141 million) in the project, getting a 5 percent stake, the source told Reuters.
The parent companies of China's top steel mill Baoshan Iron & Steel and state oil trader Sinochem International will also each take a 5 percent stake, the source said.
China's two state-owned aircraft makers, AVIC I and AVIC II, as well as the government of Shanghai, where the jets will be assembled, will also help to bankroll the programme.
AVIC I and AVIC II both supply components for Airbus's and Boeing's latest models, including the double-decker A380 jumbo jet and the 787 Dreamliner.
AVIC II unit Hafei Aviation Industry Co also makes the ERJ-145 regional aircraft in partnership with Brazil's Embraer.
Chinese airlines, which Airbus projected need about 2,650 new passenger jets in the next 20 years, have been placing big orders with Boeing and its European rival in recent years, filling up their order books.
But China, which aims to put a man on the moon within 15 years, has also set a long-term goal of making its own large aircraft, including passenger jets with more than 150 seats and jet freighters capable of hauling more than 100 tonnes of cargo.
It unveiled the country's first domestically developed regional jet, the 90-seat ARJ21-700, or "Flying Phoenix", to compete head-on with Embraer and Canada's Bombardier.
The new aircraft programme, which has been approved by China's State Council, or cabinet, may eventually compete with Boeing and Airbus, analysts and industry executives have said.
But some have expressed scepticism about the commercial prospects of a large jet designed and manufactured entirely in China, given the country's limited experience in big aircraft.
The total cost and further details of the shareholding structure of the project will be unveiled after a board meeting scheduled later this month, the source added. ($1=7.082 Yuan)