China and US close to an agreement on 'open skies' deal
China and the United States are on the verge of agreeing a landmark aviation deal that would greatly increase the number of flights between the two countries, US Secretary of Transportation Mary Peters said yesterday.
The 'open skies' agreement would scrap restrictions on the number of flights between two of the world's largest trading partners. The ultimate goal is to emulate last month's deal between the US and the European Union that opened up the lucrative transatlantic airline market.
'Without question, we have the groundwork for another landmark aviation agreement,' Mrs Peters told an audience of business executives in Beijing. 'There is no better time than the present to build on this foundation by opening the skies between China and the United States.'
She added: 'Restricting cargo and passenger flights restrains commerce. This makes little sense when two countries are trying to broaden and deepen their economic relationship.'
Mrs Peters, who was in Beijing to meet top Chinese transport officials, said senior officials on both sides agreed that a framework for a 'liberalised aviation agreement' should be settled 'in a short time', preferably before the reconvention of the strategic economic dialogue in Washington next month.
In 2004, the US and China increased the number of airlines permitted to serve US-China routes from four to nine and increased the number of flights a week fivefold to 249, but supply has failed to keep up with demand. About 16 per cent of US-China passenger traffic is now lost to third country carriers.
US officials regard opening the skies to more competition as vital for maintaining smooth economic relations between the two countries, which recorded US$343 billion worth of trade last year. A single daily flight by a jumbo jet from the airport is estimated to generate an annual US$213 million in economic activity in China.
'The global economy depends on the mobility of people, products and capital across oceans and borders. One of the most effective ways to facilitate the global flow of goods is to open international aviation markets,' Mrs Peters said.
The US also hopes more flights will translate into fresh orders for Boeing aircraft, the US' leading maker of commercial aircraft. When President Hu Jintao visited Boeing's facilities last year, he noted that China had ordered 678 aircraft from the company since 1972 at a total cost of US$37 billion.
Demand for aircraft is rising as China invests heavily in new airports. It plans to build 42 new airports, expand a further 73, and move another 11 facilities at a cost of US$17.4 billion over the next five years.
