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Construction has started on the first regional jet with Chinese intellectual property rights, the ARJ21-700.

"The project is a milestone for our aviation industry," said Liu Gaozhuo, president of the China Aviation Industry Corp I (AVICI).

On Saturday, construction started simultaneously on jet parts in factories in four Chinese cities.

This is the nation's third step in the development of its own plane.

In the 1970s, it started building the Yun-10, a commercial jet, but the project was halted in 1981.

Then, a few years later, China began co-operating with the McDonnell Douglas Corp to manufacture 35 MD-82/83 aircraft.

Local insiders say the launch of the latest project means China will soon have its first jet capable of competing with overseas rivals.

AVICI has injected 2.5 billion yuan (US$300 million) into the endeavour. It is hoped planes will be flying within two years, said Tang Xiaoping, president of the corporation's Commercial Aircraft Co.

He said the project needs a total of 5 billion yuan (US$600 million) to complete further fine-tuning of the jet's research and design.

An 85-100-seat turbofan jet, the ARJ21 will target the regional transport market in the 21st century, especially China's western interior.

At present, China relies heavily on giant international manufacturers such as Airbus and Boeing.

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