SHANGHAI - CHINA is expected by May to officially launch a company making large jets that could eventually rival Boeing and Airbus, official media reported on Wednesday.

The state assets watchdog and the government of Shanghai, where the aircraft will be assembled, will be the first and second biggest shareholders respectively, the China Securities Journal reported.

China's two major state-owned aircraft manufacturers, China Aviation Industry Corp I (AVIC I) and AVIC II, will jointly be the third largest shareholder of the firm, it said, citing unnamed sources.

Three state-owned companies - Aluminium Corp of China (Chinalco), the country's largest steel maker Baosteel Group and Sinochem Corp will each invest one billion yuan (S$193.4 million) for a five per cent stake in the 20-billion-yuan firm, it said.

China has announced a plan to develop its own big aircraft - a 150-seat passenger aircraft or freighters handling more than 100 tonnes of cargo.

China is likely to invest about 60 billion yuan in research and development for the big plane project, the source told the newspaper.

Late last year it unveiled the 70 to 100-seat ARJ-21, China's first home-made passenger airliner. -- AFP