China's first two home-grown ARJ 21 regional jets for commercial service rolled off the assembly line in Shanghai on Monday.

The turbofan regional jets, with 70 economy, and eight first-class seats, will be delivered to Chengdu Airlines next year. Another three will be assembled next year.

The project, the country's first for home-grown passenger jets, was launched in 2000 and the jet made its maiden test flight five years ago.

The ARJ 21 has received 252 orders, most from domestic airlines.

China's regional aviation market is still developing and air travel demand from small and medium-sized cities will increase as the country's urbanization picks up.

Chinese airlines currently operate a fleet of 1,996 aircraft, but planes with less than 100 seats only account for 8 percent of the fleet. Airlines have to endure losses if they fly regional routes with large aircraft.

The government has been subsidizing airlines and airport construction to boost growth in regional air travel.

The subsidies in the past five years reached 5 billion yuan ($822 million). It will grant 23 airlines a total of 912 million yuan in subsidies for regional routes in 2014, more than twice this year's subsidies, according to the Civil Aviation Administration of China.