China's Vice Premier Huang Ju pledges support for increasing aviation cooperation with the European Union to meet booming market demand. 

He made the comment at the ongoing EU-China Aviation Summit, the highest-level meeting of this kind ever held, on technological cooperation, air safety and air traffic control.

Huang Ju said at the two-day summit that the rapid development of the aviation market in China offers a lot of business opportunities. And the EU aviation industry has advanced technology and management expertise.

"We have both our own features and they are mutually complementary ... The deepening of cooperation is in our common interest," he told the meeting.

Meanwhile, Reuters reported that the European Union urged China to free up its aviation industry, the fastest growing in the world, saying only through liberalization can the sector meet booming market demand.

"We must seize the opportunity to make rapid progress in all areas, including ... expansion of the number of people who can use aviation services," said Jacques Barrot, European Commission vice president and commissioner responsible for transport.

Currently, only 20 European and Chinese airlines are allowed to fly between Europe and China, offering flights to 10 Chinese cities and 15 European cities.

The total number of flights each week between both sides amount to only 226 passenger flights and 60 cargo flights.

The number of flights allowed to and from China is insufficient to meet the needs, EU officials indicated at the summit.

Citing the World Tourism Organization's prediction that by 2020 China will become the world's biggest tourist destination and the fourth largest source of tourists, officials said China's rapidly growing economy needs a "dynamic and growing" aviation sector to support it.

They said the EU was eager to not only offer increased flights and investment, but work with China to improve safety and install reliable air traffic management systems.

"I believe that closer cooperation between China, the European Union and its member states can help deliver these objectives -- to our mutual benefit," said David McMillan, director general of civil aviation for the United Kingdom's department of transport, representing the incoming EU presidency.

Growth forecasts suggest that EU-China air traffic will increase by around 7 percent per year over the next 15 years, fueled by increasing trade and tourism, Barrot said.

"The world events which China will be hosting in the coming years, such as the summer Olympic Games, here in Beijing in 2008, and the Shanghai World Expo in 2010, will attract an even greater number of European tourists and businesses," Barrot said.

"Faced with these challenges, we must not fail."

In addition to flight restrictions, China also caps foreign investment in its aviation sector at 35 percent ownership for airlines and less than 50 percent for other segments of the sector.

While Europe also restricts foreign ownership in its airlines to 49 percent, it is ready for liberalization, said a European Commission official in charge of bilateral transport agreements.

"We are prepared to move towards 100 percent, to lift the same restrictions on ownership in Europe," the official, speaking on condition of anonymity, told reporters on the summit's sidelines.

"We believe they impede the ability of airlines to attract capital."

EU officials said they hope to eventually reach an agreement with China on full market liberalization, including lifting investment caps and more importantly, lifting flight restrictions to ensure the number of flights offered are able to meet the market's demands.

Full liberalization, however, cannot be achieved overnight, officials said.

The EU expects to reach an agreement with China by the end of the year on amending 22 bilateral air services agreements with EU member states to reflect the EU in the agreements.

After that, it will await a mandate from the EU's Council of Transport Ministers before launching negotiations with China on market liberalization.

(CRIENGLISH.com via Reuters July 1, 2005)