'Building stronger connections between the fast-growing US and Chinese economies means more opportunity, more travel and more jobs for countless Americans,' Mr Mineta said.

He also met Vice-Premier Huang Ju , who said he hoped the two countries could continue co-operating to improve transport and promote trade, according to Xinhua.

The mainland has restricted American carriers to just 20 flights a week for cargo and 34 for passengers. The pact will raise cargo flights to 41 this year, 59 next year, 71 in 2006 and 111 by 2010.

Passenger carriers will get an extra 84 flights a week, providing new seats on already heavily used routes between China and the US.

An important feature of the new agreement is the so-called 'seventh freedom' rights, which will allow carriers to ship cargo from the mainland to other Asian destinations without touching base in the US.

Beijing was willing to grant this clause on condition that American carriers establish cargo hubs on the mainland that will serve other Asian cities.

The mainland often requires foreign companies to invest in plant or technical know-how in exchange for opening its borders to trade.

'China has done something unique,' said Steve Okun, vice-president of public affairs for UPS Asia, who helped to negotiate the agreement. 'If a carrier is willing to invest in a hub, it will be given open rights, but without establishing a hub, it doesn't get those rights.'

UPS intends to set up a China hub and increase the frequency of flights between the mainland and its current Asia hub in the Philippines, and also to strategic cargo destinations such as Japan and South Korea.

Mr Okun said the new agreement could add to pressure on Hong Kong to further open its airline slots to US carriers.

'UPS would like to see the US-China agreement serve as a model for US-Hong Kong talks due to the recognition of the importance of hubs,' he said.

Cathay Pacific has been frustrated by the restrictions on its access to the mainland market. Currently, the carrier is allowed just three passenger flights a week to Beijing.

Cargo handlers at Chek Lap Kok say 70 to 80 per cent of Hong Kong's exports by air originate in the mainland.

After signing the agreement, the US Department of Transportation was quick to allocate the new flights to two American carriers.

United Airlines and Northwest Airlines each won US approval for another daily flight to the mainland. United will begin a service between Chicago and Shanghai and Northwest will fly from Detroit to Guangzhou. United and Northwest were the only carriers eligible for new flights because they are the only US airlines flying passengers to and from the mainland.

THE DEAL IN DETAIL

The deal raises the number of passenger and cargo flights from the current 54 to 249 per week by 2010; of these, 111 will be cargo flights

Five new carriers from each country will operate in six years

Airlines can fly to any cities. At present, Chinese airlines can fly to only 12 US cities and American airlines to five mainland cities

'Seventh freedom' rights will let airlines set up cargo hubs and serve third-country destinations