United Parcel Service has signed a memorandum of understanding with Sinotrans in Beijing to expand its network in China to 21 cities. The move, which is part of UPS' second stage of development in China, will include beefing up its three regional offices in Beijing, Shanghai and Guangzhou with three new regional offices. It will also expand its services to 18 cities under its own name. 'More details of the new arrangement will be released in January,' said Peter Tan, a UPS spokesman in Singapore. Under the memorandum, UPS would use its own vans, drivers and systems while tapping Sinotrans's knowledge of the local market, he said. The 21 cities would be served by employees of both UPS and Sinotrans. UPS established its first joint venture in May 1996. One issue that remains unresolved is whether UPS will be able to fly directly into China with its own planes rather than using space on commercial planes. A Singapore Business Times report quoted the UPS vice-president for the Asia Pacific, Charles Adams, as saying that he was hopeful that discussions between China and the United States over air-right extensions would result in an increase in the number of US air carriers allowed to serve China next year.