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International aviation: China

The People’s Republic of China, the world’s most populous nation, is an important partner for the European Union. Following EU enlargement in 2004, the EU is now China’s largest trading partner.

 

The Chinese air transport market is among the world’s fastest growing markets and the second largest air travel market in the world second only to the US in terms of total scheduled departing seats. Average annual growth in air travel in China has been 16% between 1958 and 2002 (45 years!). In 2010, the overall EU-China air passenger traffic market was 5.25 million passengers, which represents an increase of 11.3% compared to 2009. In year 1993 the overall EU-China air passenger traffic market was 578,000 passengers, consequently the increase in twenty years has been approximately 810 %. The 2004 agreement between China and the EU under which the Community will enjoy an “Approved Destination Status” serves to attract large numbers of Chinese tourists to Europe. As to air freight, there was an increase of 31.9 % in EU-China freight traffic in 2010 compared to 2009. Average growth in air freight traffic between the EU and China has been +16.1 % during the last five years.

China’s civil aviation sector is undergoing considerable change these years and China is gradually seeking to open both its domestic and international markets to more competition. The 2008 Olympic Games in Beijing and the 2010 World Expo in Shanghai provided major impetus to the development of an efficient and modern aviation industry and to the massive infrastructure investments necessary in the Chinese aviation sector.

In March 2005, the European Commission requested a mandate from the Council to negotiate a comprehensive EU-China air transport agreement that would establish a coherent framework in which to develop the overall EU-China aviation relations in the coming years. Such a framework would inter alia aim to improve market opportunities for both sides, promote the approximation of aviation regulation where appropriate through a process of regulatory convergence and joint mechanisms for co-operation on security, safety, environmental standards and economic regulation, thereby ensuring a level playing field, as well as foster technical and industrial co-operation. A comprehensive open aviation agreement between China and the EU would entail significant economic benefits to both sides.

As part of the closer EU-China co-operation in civil aviation, a very successful EU-China Aviation Summit was organised in Beijing in 2005 by the European Commission and the General Administration of Civil Aviation of China (CAAC). At the aviation summit, a Joint Declaration on EU-China Co-operation in Civil Aviation was signed. The co-operation envisaged in the Joint Declaration is in the process of being implemented. A framework agreement on future technical co-operation in civil aviation including matters such as safety, security, air traffic management, economic regulation and application of competition law is being prepared. Furthermore, negotiations on an EU-China "horizontal agreement" that will restore legal certainty to all bilateral air services agreements are ongoing (China has agreed the EU designation clause, whereby all EU airlines established in the territory of the EU Member State in question are allowed to apply for available traffic rights, bilaterally with EU Member States).

Hong Kong Special Administrative Region

Hong Kong has been agreeing the EU designation clause, whereby all EU airlines established in the territory of the EU Member State in question are allowed to apply for available traffic rights, bilaterally with EU Member States.

Macao Special Administrative Region

Delegations of the European Union and the Government of the Macao Special Administrative Region initialled a horizontal aviation agreement on 29 June 2011 in Macao. This agreement does not replace the bilateral agreements in place between Macao and EU Member States but brings these altogether 15 agreements in line with EU law. The horizontal agreement will remove nationality restrictions in the bilateral agreements and will thereby allow any EU airline to operate flights between Macao and any EU Member State where it is established if traffic rights under the relevant bilateral agreement are available.