But the stranglehold foreign airlines have on the most profitable routes will not be easy to crack.

Foreign carriers boast stronger logistics networks, greater flight frequencies and long-established relationships with international freight forwarders.

According to the China News Agency, international airlines controlled 65 per cent of mainland air cargo volumes last year.

Air cargo throughput in Shanghai, China's largest air cargo hub with a 27 per cent market share, reached 1.61 million tonnes last year, up 22.6 per cent over 2002.

The General Administration for Civil Aviation of China (CAAC) is projecting air freight volumes to rise 18 per cent this year to more than seven million tonnes. Of this, the regulatory body expects just 2.5 million tonnes will be handled by local operators.

A Shanghai-based European freight forwarder said 90 per cent of the export cargo his firm handled was flown out through Pudong airport on foreign air freighters.

'Many of the foreign carriers operate daily flights, which is essential for time-sensitive air cargo,' the forwarder said.

'Most mainland airlines do not have this frequency, and if we miss a flight, the cargo will be stranded for two days. We can't afford the risk.'

Other facts deterring clients from mainland carriers are shoddy customer services and outmoded electronic cargo checking systems.

'Honestly, international carriers have better check-and-chase systems,' a Hong Kong-based forwarder said.

Mainland operators are investing heavily to claim their stakes in the burgeoning international freight market, hoping to leverage home-turf advantages with new capacity.

China Cargo Airlines, the freight subsidiary of China Eastern, expanded its fleet last year to six MD-11s - a model used for long-haul services - by converting three passenger aircraft into freighters. Company chairman Ye Yigan said the company wanted to increase cargo capacity by 25 per cent this year

'We may also add several Airbus A300-600 aircraft to our cargo fleet if the market is good. They are suitable for regional routes such as Shanghai to Hong Kong, Japan and South Korea,' Mr Ye said.

China Southern, which is based in Guangzhou, is looking to spin off its cargo operations to focus developmental resources on the sector.

The company hopes to increase cargo revenue contributions to the group to 20 per cent, from 9 per cent now, although the company did not provide a target timetable.

Air China Cargo, Air China's cargo division which operates four Boeing B747-200 freighters, is also expanding capacity, with up to two B747-400F this year and four smaller aircraft next year.

Market experts question the business wisdom of mainland carriers expanding to international destinations before developing sufficient import streams from abroad.

Robust export volumes mean there is no trouble filling out-going flights, but the planes may return without full loads until a sufficient customer base is built abroad.

'I doubt mainland carriers have enough [overseas] sales offices to lure cargo for their return flights,' one cargo analyst said.

'It's a chicken-and-egg question. Without enough cargo, how can airlines expand frequencies? Yet it would be hard for them to grow market share without sufficient service frequency.'

The mainland's on-going liberalisation of the aviation sector adds additional pressure.

Since last year, CAAC has been granting foreign airlines cargo fifth-freedom rights - the right to pick up cargo on the mainland before flying to a third destination.

Qantas Airways started flying its cargo service to the US via Shanghai in February. Singapore Airlines recently began a thrice-weekly round-the-world cargo service - Singapore, Xiamen, Nanjing, Chicago and Brussels - with 747-400F jets. Malaysia Airlines will start cargo flights to Amsterdam via Hangzhou this month, and from Hangzhou to Los Angeles in June.

The good news for mainland airlines is that China export volumes are growing, creating plenty of cargo business for everyone. Forwarders report that freight rates from Shanghai in the first quarter of this year rose 10 per cent.

One mainland airline executive pointed out that local carriers retained significant market advantages, especially on domestic routes where foreign operators had negligible penetration.

'Mainland carriers have domestic traffic rights. Besides, the market is still relatively protected. If their services can catch up with international standards, there's plenty of room for them to grow,' the airline executive said.

One local operation that stands to benefit is China Southern's international freight service, supported by the airline's 49 per cent stake in a domestic air cargo mainstay, China Postal Airlines.

China Postal has a 40 per cent share of the domestic express cargo market. The company operates eight locally made Y-8 and one B737-300 aircraft and plans to take delivery of three more B737-300 aircraft this year.

The carrier runs 10 domestic routes and a weekly flight from Shanghai to Osaka.

Yangtze River Express, a domestic freight carrier owned by Hainan Airlines, is cashing in on its position in the domestic market by forming a partnership with US cargo giant United Parcel Service. It operates feeder links to the UPS hub in Shanghai from Beijing, Qingdao, Xiamen and Guangzhou, using four Boeing 737-300QCs.

Shenzhen-based Jetwin Air Cargo, a privately owned airline applying for an operating permit, is contemplating a similar business model. The firm plans to operate a daily domestic Shenzhen-Shanghai-Dalian-Nanjing-Shenzhen feeder service in February next year using a leased B737-300 freighter.

'Partnering with international carriers will make our business a lot easier,' a Jetwin executive said.