The United States has requested regulatory flexibility to set up a cargo hub in China during two days of informal discussions with mainland aviation officials. The 'constructive' discussion, which concluded on Thursday, ended with an agreement from both sides to meet for formal talks early next year, a source close to the talks said. 'The US side asked for open skies,' the source said. 'They asked for increasing frequencies in freighter services and they want to set up aviation hubs in mainland cities.' The US representatives also requested the right to change the gauge of the aircraft they use in any given city, which would allow them to fly larger aircraft and distribute cargo with smaller planes within the region. 'Both sides found common ground for formal talks as China also needs expanding aviation services to support its rapid economic and trade growth,' he said. In return, the mainland officials asked for an easing of restrictions on visa applications for mainland travellers visiting the US - a demand that appeared to go beyond traditional aviation negotiation practices. Mainland travellers to the US are restricted by stringent and complicated visa application procedures. Other than destinations already served, passenger flow cannot support origin and destination traffic on other routes, making access to new locations unattractive for mainland airlines now. Analysts said mainland airlines had limited scope for expanding flights to the US because they could not compete with international carriers, prompting speculation that the authorities would ask for code-share agreements in the discussions. 'The China side asked for more liberalisation in cargo business, but not as aggressively as the US due to the limitations in their capacity and competitiveness,' the source said.