China yesterday threw open its coveted travel and high-value trade sectors to American competitors after forging an air services agreement (ASA) that will see five times as many flights between the countries by 2010. The deal gives five new airlines from each side access to the US-mainland markets and will see weekly flights grow to 249 from 54 in the next six years. 'This agreement recognises the critical role of commercial aviation in the rapidly growing US-China trade relationship,' US Transportation Secretary Norman Mineta said. 'This agreement represents a giant step forward in creating an international air transportation system that meets the needs of the new global marketplace.' All code-sharing restrictions were immediately lifted and both countries' airlines will be allowed to fly to any city. The deal comes as Cathay Pacific Airways grows increasingly frustrated by a lack of progress in Hong Kong-mainland talks. 'It is obviously a good thing that China is taking a more liberal approach to ASA negotiations,' said David Dodwell, an aviation industry consultant. 'What is a concern is that Beijing is handing out huge opportunities to other international carriers while Hong Kong and its carriers are being starved of such opportunities.' Cathay, Hong Kong's No 1 carrier, has rights for only three passenger flights a week to Beijing. Mr Dodwell said the appearance was that Hong Kong's negotiators were taking a far less aggressive approach than international negotiating teams such as the US. The agreement, to be signed 'within the next month', is sure to stimulate more direct travel and trade between the mainland and the US, some of which may come at Hong Kong's expense. Cargo handlers at Chek Lap Kok say 70 to 80 per cent of Hong Kong's exports by air originate on the mainland, with exporters using the airport's wide network of flights as a gateway to western markets. But four months of 'informal' ASA talks between officials from the Economic Development and Labour Bureau and mainland counterparts have made little progress. In the meantime, Beijing has struck aviation deals with South Korea, Thailand, Australia, Malaysia and Britain, giving rise to fears that so much opportunity for direct trade will damage Hong Kong's regional hub status. Yesterday's reciprocal deal with the US will give passenger-carriers 84 extra flights a week while bumping the weekly quota for cargo carriers to 111. Federal Express (FedEx), whose Asia-Europe hub is at Hong Kong's Asia Airfreight Terminals, has been playing off officials on the mainland and the Philippines as it decides on a location for its new Asia-Pacific hub. The extensive regulatory liberalisation in yesterday's deal would appear to open the way for FedEx to now opt for Guangzhou's new Baiyun International Airport. The deal, the first between the nations in five years, opens the door to the vast China market for one US cargo carrier before the end of the year.
