China's homegrown large passenger plane C919 takes off on its maiden flight in Shanghai, east China, May 5, 2017. (Xinhua/Ding Ting)

Commercial Aircraft Corp of China Ltd, the Shanghai-based State-owned passenger plane manufacturer, said on Thursday that it plans to establish a multibillion yuan fund this year to support further research and development of aircraft components and related supply companies.

The company said the COMAC fund is undertaking the registration process and more than 10 billion yuan ($1.4 billion) in funds are set to be in place.

The company said the investment fund is expected to drive rapid growth of upstream and downstream industry chains and other high-end manufacturing sectors, such metallurgical processing and dynamic controls, for the C919－the homegrown large passenger jet.

Such funds are expected to nurture the involved companies through direct investment and help them launch more mergers and acquisitions within the industry, according to analysts.

"Chinese companies are capable of making most aircraft components, but are less competitive due to higher costs and the design and quality can't catch up," Shanghai Securities Journal quoted an unidentified senior aircraft engineer as saying.

The successful maiden flight of the C919 has proved COMAC's capability of making modern aircraft, the engineer said. The next step is to nourish Chinese companies in order to make the aircraft structures and components another proud Made-in-China product range.

In the early stage, the fund will concentrate on the development and research of aircraft components such as engines, controls and electronic devices.

More than 240 local companies serve as suppliers and manufacturers for the C919, which has more than 100,000 components.

Lin Zhijie, an aviation industry analyst and columnist at Carnoc.com, one of China's largest civil aviation web portals, said the successful maiden flight of the C919 proved COMAC's capability in designing and assembling narrow-body commercial aircraft in line with international standards.

The next step for COMAC, he said, is to support more Chinese companies in the aircraft manufacturing chain. The fund will provide favorable support for industry growth.

"A lot of Chinese aviation manufacturing companies don't have enough capital and financial strength for the research and development of high-end manufacturing, especially making these complicated aircraft components," Lin added.

"They need external support to grow faster and produce more competitive products."