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China will further open up its air cargo market in an active, gradual and orderly way, announced Yang Yuanyuan, director general of the General Administration of Civil Aviation of China at the International Air Cargo Association (TIACA) Summit 2006 in Beijing on Monday.

 

This is the first time that TIACA is holding its summit in China and indeed in the Far East.

 

The Miami-based association is among the most influential cargo transport organizations in the world and its members include most of the major airlines, airports and cargo forwarding companies.

 

Also discussed during the summit were plans for the construction of air transportation hubs that will in turn encourage the expansion of China aviation rights to foreign companies. Sino-foreign joint ventures were also encouraged to set up all-cargo airline companies.

 

Yang added that China has signed relatively relaxed agreements on bilateral transportation with US, India and some other countries.

 

In July 2004, a landmark agreement between China and US on air cargo delivery was signed. The agreement, for the first time, allowed US air transport companies to set up cargo transport hubs in China.

 

Further, the granting of Fifth Freedom Rights for air cargo in cities such as Haikou serves as added impetus for foreign airfreight companies to do business in China. Fifth Freedom Rights enable an airline/freight forwarder to load and unload cargo or passengers at a particular destination and leave directly for another place without first having to return to its country of origin.

 

The airfreight sector is a current investment gem. Five air cargo companies, including Jade Cargo International Company Limited, Great Wall Airlines Company Limited, Shanghai International Air Cargo Company Limited, have been approved for construction, according to Yang. They are expected to start business later this year.

 

As per China's World Trade Organization commitments, its logistics industry was opened last December to wholly foreign-owned enterprises. This gave multinational companies such as UPS and DHL, which have been eyeing the Chinese market for a long time, a foot in.

 

TIACA Chairman Gary Bartek said that China’s rapidly growing air cargo sector represents a huge market that should not be neglected.

 

It is predicted that in the following several years, air cargo volume in China will maintain an average annual growth rate of over 10 percent, far exceeding the world average of 6.2 percent.

 

(China.org.cn by Yuan Fang, April 13, 2006)