A company under the Civil Aviation Administration of China is building a new line of 70-seat airplanes - the ARJ21 - for domestic flights and possible export.
However, China Aviation Industry Corp I (AVIC I), builder of the ARJ21, had not lined up clients and would not decide how many aircraft to build until it found customers, said Wang Qiming, chief of the company's aircraft manufacturing bureau.
A Western diplomat who followed aviation trends expected the company to make about 250 aircraft.
AVIC I could spend as much as 7.8 billion yuan (about HK$7.3 billion) on the new aircraft and might contract with European companies for components as buyers came forward, Mr Wang said.
The diplomat said companies like Rolls-Royce might be asked to make engines and avionics.
'[AVIC I] do build engines, but will be looking for a level of sophistication they don't have,' the diplomat said, speculating AVIC I would ultimately seek approval from United States and European aviation officials to export ARJ21s to the West.
Mr Wang said factories in Shanghai, Xi'an and other cities would work on the aircraft until the end of 2006. The price per plane had not been set, he said.
The diplomat said four Chinese airlines had expressed interest in the planes to take passengers on shorter routes rather than waste money by using larger Boeing or Airbus aircraft.
During the past decade, China built airports in smaller cities, including five in parts of Yunnan province that were hard to reach by train.