China will begin research on a larger version of its first homemade passenger jet - Xiang Feng - after its first flight next year, Shanghai Securities News reported on Dec. 24.

The China Aviation Industry Corporation I, better known as AVIC I, will cooperate with Canada's Bombardier to initiate the research, the report said.

Talks between AVIC I and Bombardier are going smoothly, but the final design of the new jet is still under discussion, the report quoted Wang Weiya, the head of AVIC I's civil aviation department as saying.

ARJ21-900, the second generation jet of Xiang Feng, whose code name is ARJ21-700, will have 105 seats with all economy class, a larger capacity than Xiang Feng's 90 seats, Wang said.

China launched Xiang Feng in Shanghai on Dec. 21, marking a major step forward for the domestic aviation market.

China is estimated to need another 800 to 1,000 regional jets by 2020 and the production capacity of ARJ will reach 30 aircraft annually by 2011.