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Expectations are growing that China will soon restructure its sprawling state-owned aircraft makers, Avic I and Avic II, in an effort to make them both more competitive and to pool their resources to develop large commercial jets.

The two groups lead the nation's drive to become a force in civilian aircraft production and to provide advanced warplanes for the People's Liberation Army. Beijing has yet to publicly comment on government plans for the companies and any restructuring would require a consensus among their bureaucratic overseers, which could be difficult to achieve.

Local media, however, reported last week that an announcement is likely by March outlining some form of consolidation between the two groups and the creation of a new company to produce large airliners. This move would be aimed at strengthening the country's aviation manufacturing capabilities and bringing together resources to carry out a large commercial airplane project, according to a manager at Avic II.

Whether or not Avic I and Avic II will merge is uncertain. The two groups were created less than a decade ago when China's former aircraft manufacturing monopoly was split. They both compete and cooperate across a range of aviation-related businesses.

If successful, reorganization would help Beijing to meet a target, announced last March, to launch production of large commercial aircraft by 2020.

Avic I and Avic II already cooperate with leading international aircraft makers including Boeing, Airbus, Bombardier of Canada and Embraer of Brazil, while China's rapidly expanding civil aviation market offers powerful potential demand for locally produced airliners.

However, while Avic I recently unveiled their ARJ-21, a locally assembled regional jet with up to 100 seats – and both it and Avic II build 50-seat turboprops – analysts say it is unclear whether either has the capability to develop a large jet that would be competitive.

Restructuring could pose a number of problems. For the two groups do not have a clear shareholding structure and come under the split authority of China's state-owned Assets Supervision and Administration Commission and its Commission of Science, Technology and Industry for National Defence.