Communication from the Commission - A Community civil aviation policy towards the People’s Republic of China - strengthening co-operation and opening markets.
Date: 2005-03-11
Institutions: European Commission
Subjects: China, air transport, civil aviation, competitiveness, cooperation policy, transport infrastructure, transport safety, vocational training

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.03.2005 
COM(2005)78 final 

COMMUNICATION FROM THE COMMISSION 

A Community civil aviation policy towards the People’s Republic of China 
- strengthening co-operation and opening markets. 

EN 

   EN 

 
 
 
  
1. 

1.1 

INTRODUCTION AND SUMMARY 

The  People’s  Republic  of  China,  the  world’s  most  populous  nation,  has  emerged 
over  the  past  15  years  as  a  key  player  in  world  affairs,  reflecting  its  extraordinary 
growth  and  economic  development.  China  is  becoming  an  increasingly  important 
partner for the European Union - and vice versa - both economically and politically. 

China is making continued progress in the reform of its economy. China’s accession 
in December 2001 to the World Trade Organisation was significant and will pave the 
way  for  further  market  opening  and  foreign  direct  investment.  In  2003,  China 
became  the  EU’s  second  largest  trading  partner  after  the  US  and  the  EU  became 
China’s second largest export market. Following EU enlargement in 2004, the EU is 
now China’s largest trading partner. 

1.2 

The  Chinese  air  traffic  market  is  among  the  fastest  growing  in  the  world.  The 
average  annual  growth  rate  of  air  travellers  in  China  has  been  approximately  16% 
between 1958 and 2002 and high growth rates are expected to prevail until 2020.1 

China  therefore  offers  a  strong  potential  for  growth  also  for  airlines,  aircraft 
manufacturers and service providers in Europe. 

The  2008  Olympic  Games  in  Beijing  and  the  2010  World  Expo  in  Shanghai  will 
provide major impetus to the restructuring and investments in the aviation sector to 
allow China to use these events to demonstrate an efficient and modern image to the 
world.  However,  China  is  facing  significant  challenges  in  this  respect,  notably  in 
matching  continued  safety  developments  with  the  spectacular  growth  rates  in  air 
traffic. 

1.3 

China is taking a gradual and selective yet determined approach to market opening in 
civil  aviation.  As  a  consequence  of  the  “open  skies”  judgements  of  the  European 
Court  of  Justice  on  5  November  2002,  the  bilateral  agreements  between  Member 
States  and  China  are  unsustainable  and  need  to  be  amended.  The  Commission  has 
been  given  a  “horizontal”  mandate  to  negotiate  with  third  countries  such  necessary 
corrections to bilateral agreements. 

However, in view of (i) the growing importance of the Chinese aviation market, (ii) 
the difficulties encountered by individual Member States in seeking to bring bilateral 
agreements into conformity with Community law  and (iii) the  benefits of replacing 
the  fragmented  European  approach  in  its  relations  with  China  with  a  co-ordinated 
and liberal approach, the Commission is of the view that it is now time to develop a 
wider range of opportunities between China and the Community in air transport. 

1.4 

In  parallel  to  this  Communication,  the  Commission  therefore  recommends  that  the 
Council  would  authorise  the  Commission  to  negotiate,  on  behalf  of  the  European 
Community,  a  comprehensive  Open  Aviation  Agreement  with  China.  Positive 
exploratory contacts between the General Administration of Civil Aviation of China 

1 

The General Administration of Civil Aviation of China (CAAC), 2004 

EN 

2 

   EN 

 
                                                 
2. 

2.1 

2.2 

2.3 

2.4 

(CAAC) and the services of the European Commission were initiated in May 2004, 
which may serve as a good basis for entering into formal negotiations with China. 

THE  GROWING  IMPORTANCE  OF  EU-CHINA  POLITICAL  AND  ECONOMIC  CO-
OPERATION  

In  recent  years,  the  Chinese  economy  has  performed  spectacularly  well  with 
economic growth rates above 7% in 14 consecutive years. In 2003, China’s economy 
grew  by  9.1%,  the  highest  level  for  seven  years.  Economic  growth  in  some  of  the 
large urban centres, which leads China’s economic development, even far out-strips 
the average economic growth rates.  

It is generally recognised that the demand for air transport is closely linked with the 
development  of  GDP.  Against  this  background,  and  in  view  of  the  improved 
spending basis of the growing urban middle class representing an important potential 
for  tourist  travelling,  continuously  growing  demand  for  air  transport  in  China  is 
expected.  

EU-China trade is growing faster than China’s trade with its other two main trading 
partners  (Japan  and  the  US).  Total  trade  for  2003  between  China  and  the  EU  was 
estimated to be worth a total of €135 billion, up more than 15% on 2002. Following 
EU enlargement in 2004, the EU is now China’s largest trading partner. 

Buoyed  by  its  sheer  size  and  its  nearly  1.3  billion  population  (22%  of  World 
population), extraordinary economic growth rates and immense potential in general, 
China’s  economic  weight  and  political  status  in  the  world  today  is  very  different 
from  what  it  was  as  recently  as  in  the  1990s.  A  broad  political  dialogue  between 
China and the EU was formally established in 1994.  

Enhancing China-EU relations is an important component of China’s foreign policy. 
In  its  first-ever  “EU  Policy  Paper”,  the  Chinese  Government  outlined  in  October 
2003 its priority areas and plans for strengthening the China-EU political, economic 
and trade relations. 

Improving market access and investment conditions in China is a key objective for 
the EU. In particular, further reform and liberalisation will help China attract foreign 
investment  and  technological  know-how,  and  to  sustain  economic  growth.  This  is 
true for any sector of the economy but for civil aviation in particular. 

The Sixth EU-China Summit held in October 2003 clearly demonstrated that China 
now  recognises  the  Community  as  such  as  a  primary  interlocutor  for  Europe.  With 
EU enlargement and the process of European integration, Community-level contacts 
and co-ordination with the EU will become increasingly important for China as well 
as for the Union. This also applies to civil aviation in relation to which the EU and 
China  agreed  at  the  Sixth  Summit  that  co-operation  should  be  widened  and 
deepened.  This  was  confirmed  in  May  2004  during  the  visit  of  Chinese  Prime 
Minister  Wen  Jiabao  to  the  EU  Headquarters  in  Brussels  and  further  emphasised 
during  the  Seventh  EU-China  Summit  held  in  December  2004.  At  the  Seventh 
Summit,  the  possibility  of  a  future  EU-China  Civil  Aviation  Agreement  was 
envisaged. 

EN 

3 

   EN 

 
3. 

CHINA’S  GROWING  IMPORTANCE  IN  INTERNATIONAL  AVIATION  –  A  MARKET 
PROFILE 

China – a strategic civil aviation market in rapid growth 

3.1 

Over  the  past  decade,  the  Chinese  air  traffic  market  has  been  among  the  fastest 
growing in the world. The average annual growth rate of domestic and international 
air traffic in China has been around 16% between 1958 and 2002. Total number of 
air  traffic  passengers  was  expected  to  exceed  100  million  in  2004  while  cargo  was 
forecasted to reach 2.5 million tons. 

Since 1990, the number of seats available on scheduled non-stop flights between the 
EU  and  China  has  increased  from  250,000  to  nearly  3  million  in  2003  (+1150%).2 
The growth in available seats on scheduled non-stop flights to Japan, which is still 
the  EU’s  largest  air  traffic  market  in  Asia,  “only”  grew  by  378%  over  the  same 
period. 

3.2 

Until  as  recently  as  10  years  ago,  Beijing  was  the  only  destination  for  European 
flights to China. Since then and until 2003, all flights to China have been to Beijing 
and Shanghai with Shanghai experiencing an extremely rapid growth now receiving 
more than 35% of all air passenger traffic from Europe. New routes are now being 
opened to a number of other Chinese cities. 

Eight  EU  carriers  currently  fly  passengers  to  China  on  scheduled  routes  while  all 
three main Chinese airline groups (Air China, China Eastern and China Southern) fly 
to  Europe.  A  total  of  21  routes  are  now  operated  between  China  and  the  EU.  The 
largest share of the non-stop traffic between the EU and China is with Germany with 
38% of the total traffic, while France has 23% and the UK 9%. Of a total number of 
weekly frequencies between the EU and China of 141 in April 2004, Air China had a 
share of 28% while Lufthansa had a share of 17% and Air France 15%. 

Looking forward 

3.3 

While  future  growth  rates  in  Chinese  air  passenger  traffic  may  be  less  spectacular 
than  in  recent  years,  they  will  still  be  impressive.  The  International  Air  Transport 
Association, IATA, forecasts an average annual growth of 8.6% in passenger traffic 
in  China  over  the  period  2003-2007.  This  is  nearly  three  times  the  world  average 
growth  rate  forecast  by  IATA.  Cargo  is  generally  expected  to  grow  faster  than 
passenger traffic. 

The CAAC expects even higher growth rates for air traffic with an expected average 
annual increase until 2020 of 15%. 

China  is  therefore  expected  over  the  next  10  years  to  become  the  largest  Asian 
market  and  leading  hub  for  air  passenger  traffic  as  well  as  for  international  cargo 
traffic thereby taking over Japan’s current leading position. China’s total passenger 
traffic  is  expected  to  increase  from  approx.  100  million  passengers  in  2004  to  215 

2 

Source: OAG schedules 

EN 

4 

   EN 

 
                                                 
million  passengers  in  2014  thereby  increasing  its  total  share  of  Asian-Pacific  air 
passenger traffic to 25% up from 10% in 1985.3 

Approved destination status 

3.4 

One  of  the  key  drivers  in  Chinese  air  traffic  demand  and  development  will  be 
tourism. International tourist arrivals to China grew by 11% in 2002, making China 
the  fifth  largest  recipient  of  tourists  in  the  world.  Chinese  outbound  tourism 
amounted  to  20  million  tourists  in  2003  (+22%  year-on-year)  overtaking  Japan  to 
become Asia’s largest source of tourists. It is estimated that by 2020 the number of 
Chinese outbound travellers will have reached 100 million. 

To  facilitate  and  attract  visits  of  Chinese  tourist  groups  to  Europe,  the  Community 
and  the  Chinese  government  signed  in  February  2004  a  Memorandum  of 
Understanding  under  which  the  Community  will  enjoy  an  “Approved  Destination 
Status” (ADS). Chinese tourist groups are only allowed to travel to countries which 
have been granted ADS by China. Until now, private tourism from China to the EU 
has not been possible. 

The ADS scheme will ease the process of visa applications for Chinese tourist groups 
wishing to visit Europe. 

The implementation of the ADS scheme is expected to generate significant numbers 
of  new  Chinese  tourists  visiting  Europe.  This  will  have  profound  implications  on 
airline  and  airport  capacity  with  airlines  already  adding  capacity  to  China  to  meet 
increasing demand. 

4. 

4.1 

TRENDS IN CHINESE AVIATION POLICY - OPENING SKIES 

China’s  civil  aviation  sector  is  undergoing  considerable  change  these  years.  The 
transformation  of  the  Chinese  civil  aviation  sector  appears  to  be  a  gradual  move 
away  from  central  planning  towards  a  combination  of  decentralisation  and 
globalisation. 

Aviation  developments  and  policies  in  China  are  characterised  notably  by  the 
following key features: 

•  Consolidation of the airline industry into three main airline groups 

•  Emerging liberalisation and market opening both internally and externally 

•  Development of new airport infrastructure and air traffic management technology 

Each of these features will briefly be examined in the following. 

3 

“Asia/Pacific Air Traffic – Growth and Constraints”, Air Transport Action Group (ATAG), 2001 

EN 

5 

   EN 

 
                                                 
4.2 

4.3 

4.4 

4.5 

Consolidation 

In the mid 1990s, Chinese aviation industry was characterised by poor safety records 
with  serious  accidents.  In  addition,  over-capacity  led  to  intense  price-cutting  and 
fierce  competition  in  the  domestic  market  which  restricted  international  expansion. 
This led the government to pursue a policy of consolidation and price control of the 
largely  state-controlled  airline  industry.  Following  only  modest  progress  in  the 
restructuring in the late 1990s, the CAAC announced in July 2000 that the 10 carriers 
under  its  direct  administration  would  be  merged  into  the  three  main  airline  groups. 
As a result of this, three airline groups with similar numbers of aircrafts (ca. 100) and 
assets (ca. USD6bn) have emerged centred around three main geographical centres: 
Air China (Beijing), China Eastern Airlines (Shanghai) and China Southern Airlines 
(Guangzhou). 

The  three  main  airline  groups  account  for  about  80%  of  flights  in  China.  The 
consolidation  of  the  airline  industry  has  created  profitable  operators  with  strong 
balance  sheets,  which  have  been  able  to  expand  and  compete  internationally  and 
attract  foreign  investment  and  partners.  Chinese  airlines  have  traditionally  had  a 
domestic  focus  with  only  13%  of  total  passengers  carried  by  the  top  5  Chinese 
airlines in 2002 being international traffic. 

The  once  fully  state-owned  airlines  are  now  listed  on  the  stock  markets  and  being 
partly  privatised.  The  direct  control  over  the  state  shareholding  in  the  airlines  has 
been  transferred  from  the  CAAC  to  other  government  agencies  and  the  CAAC  is 
now solely focusing on its regulatory role. 

Market opening 

China  is  clearly  signalling  its  intention  and  willingness  to  open  its  domestic  and 
international  air  transport  markets  to  more  competition.  The  CAAC  has  announced 
that  it  will  progressively  open  mainland  China  air  traffic  rights  to  foreign  carriers 
including more cabotage rights and encouragement of more foreign carriers to fly to 
China and more mainland carriers to serve foreign cities. 

4.6 

CAAC  intends  to  liberalise  the  Chinese  aviation  market  in  three  phases  which  by 
2010 should have led to an opening of 70-80% of the air transport industry. 

CAAC  is  also  progressively  deregulating  air  fare  pricing  to  give  airlines  greater 
flexibility in setting fares according to market demand. 

Reports that the CAAC is also welcoming low-cost airlines as a strategy for boosting 
middle  class  tourism  and  economic  development  in  Western  China  is  a  further 
significant sign of liberalisation. 

As  a  result  of  its  new  policy,  CAAC  has  signed  a  series  of  increasingly  liberal  air 
services arrangements with third countries including Singapore, Thailand, Australia 
and  most  recently  the  US.  Often  the  cargo  services  are  leading  the  way  in 
liberalisation but are followed by similar moves in passenger traffic. 

EN 

6 

   EN 

 
4.7 

China is also liberalising rules for foreign investment in civil aviation. In 2002 a new 
Decree  on  “Provisions  on  Foreign  Investment  in  Civil  Aviation”  entered  into  force 
designed  to  reinforce  the  opening  of  the  civil  aviation  industry  of  China  and 
stimulate foreign investment both in airports, airlines and other projects and services. 
Foreign investors can, however, not take control over Chinese airports or airlines. 

Infrastructure - airports, aircraft and air traffic management 

4.8 

In  order  to  meet  the  growing  demand  for  air  transport  services  in  China,  massive 
investments in air transport infrastructure are required both in airports, aircrafts, air 
traffic management technology and supporting facilities. 

Since 1990, China has built more than 25 new airports and had in 2002 a total of 160 
civilian airports. The number of airports is expected to increase to 260 by 2015. 

The new projects include a new airport in Guangzhou; expansion of Beijing’s Capital 
International Airport including a new runway for planned completion in 2007 in time 
for  the  2008  Olympic  Games;  and  expansion  of  Shanghai’s  Pudong  airport  with  a 
new runway for planned completion by 2005-2006. Total investments at these three 
designated  international  hubs  alone  are  estimated  at  more  than  5  billion  USD  over 
the next four years. 

Ownership and control over airports has recently been decentralised to the provincial 
and  municipal  authorities,  which  now  have  a  strong  incentive  to  develop  their 
regional aviation market and attract private capital to support this. 

4.9 

The  CAAC  forecasts  that  Chinese  airlines  will  need  to  add  nearly  1800  new 
passenger aircraft to their fleets over the next two decades. This offers the European 
aerospace  industry  significant  business  opportunities,  particularly  in  the  important 
market segment of large civil aircraft. 

China  will  also  require  new  air  traffic  management  technology  to  manage  the 
steadily increasing air traffic. It is expected that China will need to invest more than 
1.1 billion USD over the next decade in improving its air traffic management (ATM) 
infrastructure. Virtually all of this equipment will need to be imported and European 
industry is well placed to provide this technology. 

In  addition,  China  will  need  to  modernise  a  wide  range  of  support  facilities  and 
services  such  as  ground  handling,  refuelling  etc.  China  should  make  efforts  to 
remove obstacles to market entry in these sectors including in relation to fuel supply 
and computer reservation systems, where current practices are discriminatory against 
foreign suppliers. 

Key challenges facing China’s civil aviation sector 

4.10 

The spectacular growth in Chinese civil aviation has its own negative side effects and 
matching  the  rapid  growth  in  demand  for  air  transport  with  aviation  safety 
developments  and  the  implementation  and  management  of  modern  technology  is 
proving very demanding. 

CAAC has therefore identified the following main challenges for further developing 
safe and market-driven civil aviation in China: 

EN 

7 

   EN 

 
•  Improve safety and security regulation and oversight capabilities 

•  Further expansion of infrastructure 

•  Optimise utilisation of air space 

•  Better training of personnel 

•  Develop market mechanisms and competition laws 

•  Adapt airlines and airports to become more competitive 

In view of these challenges, there is a very strong Chinese interest in learning from 
the European experiences in developing safe and competitive air transport services. 
In this context, the EU co-financed “EU-China Civil Aviation Co-operation Project” 
has been seen by the Chinese as a very valuable project. The project started in 1999 
and has enjoyed a total of more than 15 million € in Community funding. Both the 
Chinese  authorities  and  industry  as  well  as  European  industrial  interests  have 
expressed a strong interest in a continuation on a longer-term basis of this project or 
similar co-operation structures. 

5. 

5.1 

WHY A COMMUNITY APPROACH IN EXTERNAL AVIATION RELATIONS? 

Since the 1960s, EU-China relations in civil aviation have been based on bilateral air 
services agreements between individual Member States and China with little, if any, 
coordination at Community level. 19 out of the 25 EU Member States have bilateral 
air  services  agreements  with  China  (all  except  Cyprus,  Ireland,  Lithuania,  Malta, 
Portugal  and  Slovenia).  All  these  bilateral  agreements  are  based  on  national 
designation  at  Member  State  level  of  a  single  (or  in  a  few  cases  more)  national 
carriers  which  are  allowed  to  operate  on  routes  to  China.  Moreover,  traffic  rights 
allowed under the bilateral agreements are also limited hence restricting the scope for 
competition. 

Following  the  judgements  of  the  European  Court  of  Justice  on  5  November  2002, 
existing bilateral air services agreements based on national designation urgently need 
to be amended to include Community designation clauses permitting designation of 
any Community air carrier established in a Member State. 

5.2 

A  dialogue  between  the  Chinese  civil  aviation  authorities  and  the  services  of  the 
European  Commission  was  initiated  in  May  2004  during  which  the  Commission 
services informed CAAC about the need to amend existing air services agreements. 
Both  sides  expressed  their  interest  in  continuing  discussions  with  the  aim  of 
resolving this matter as soon as possible. 

The  two  sides  agreed  to  continue  the  dialogue  and  to  further  develop  co-operation 
with  the  objective  of  reaching  a  comprehensive  agreement  between  China  and  the 
Community. The services of the European Commission informed the Chinese side of 
their  intention  to  take  the  necessary  steps  to  request  a  mandate  from  the  Council 
authorising it to negotiate such an agreement with China. 

EN 

8 

   EN 

 
During the May 2004 meeting, CAAC presented a wide range of proposals for closer 
technical  co-operation  and  EU  assistance  in  civil  aviation  including  in  relation  to 
safety  management,  air  traffic  control,  airworthiness  certification,  regulation  of 
market access and application of competition law and flight standards. 

5.3 

This  Communication  requesting  a  mandate  for  negotiating  a  Community-wide  air 
services  agreement  with  China  follows  naturally  from  the  judgements  of  the 
European  Court  of  Justice  and  the  political  agreement  reached  by  the  5  June  2003 
Transport Council. It also reflects the acceptance of the Community as negotiator of 
international agreements in many economic sectors including in air transport. 

The  Commission  is  currently  negotiating  air  transport  agreements  under  the 
“horizontal mandate” with a number of countries and has initialled agreements with 
some  countries  already.  Such  agreements  could  be  the  first  step  towards  a  more 
comprehensive  open  aviation  agreement  between  the  Community  and  these 
countries.  In  2004,  the  Commission  issued  a  Communication  on  a  “Community 
aviation  policy  towards  its  neighbours”4,  which  recommended  further  more 
comprehensive Community negotiations with a number of neighbouring countries. In 
December  2004,  the  Commission  was  given  a  comprehensive  mandate  for 
negotiating with Morocco and the Western Balkans. 

5.4 

As  the  EU  has  developed  a  strong  Community  dimension  of  its  internal  aviation 
market  it  would  be  illogical  if  such  a  dimension  was  not  pursued  also  in  the  EU’s 
external relations. Moreover, the experiences which the EU has gained in this respect 
are considered highly valuable by third countries. 

The European Commission’s White Paper “European transport policy for 2010: time 
to  decide”5  stressed  the  need  for  the  Union  to  increase  its  ability  to  assert  itself  in 
international relations and speak with a single voice in international arena in defence 
of  its  industrial,  social  and  environmental  interests.  The  EU  has  demonstrated  in 
several areas that it can obtain and deliver more when it acts in strong unity and as 
one. 

5.5 

However, the European Union remains - unlike the US - fragmented in its relations 
with third countries. 

The conduct and outcome of bilateral negotiations in recent months between Member 
States  and  third  countries  have  not  yet  led  to  the  necessary  alignment  of  existing 
agreements  with  Community  law.  The  Community  and  Member  States  therefore 
must act together to regulate access, ensure the development of industry and achieve 
compliance with Community legislation. 

5.6 

There is no reason why the benefits of opening market access and investment rules in 
third countries such as China in principle should not be similar to the benefits of an 
EU-US Open Aviation Area. Indeed, a recent study commissioned by the European 
Commission  has  made  an  indicative  assessment  of  the  potential  longer-term 
economic  benefits  for  both  sides  involved  in  a  fully  liberalised  EU-China  aviation 
market, which could be in the order of several hundred million € per year. 

4 
5 

COM(2004)74, “A Community aviation policy towards its neighbours”, 9 February 2004. 
COM(2001)370 

EN 

9 

   EN 

 
                                                 
Obviously, it will be of paramount importance to ensure that opening and integration 
of  markets  is  undertaken  in  a  balanced  manner  that  takes  into  account  other 
important  policy  objectives  and  mitigates  potential  adverse  impacts,  be  it  in 
competition, environmental protection or other areas. Flexibility for the EU to apply 
the economic or regulatory instruments that are necessary to counter-balance adverse 
environmental  impacts  from  the  expected  growth  in  traffic  volumes  should  also  be 
ensured. 

Proposing  a  comprehensive  mandate  for  the  negotiations  with  China  that  more 
adequately reflects the EU’s position in the world today would clearly strengthen the 
negotiating  position  of  the  Community  and  also  signal  the  determination  of  the 
Community to resolve outstanding infringements of Community law and competence 
to  open  markets  and  sustainable 
and  demonstrate  Europe’s  commitment 
development. 

REQUEST FOR AND SCOPE OF A NEGOTIATING MANDATE 

As this Communication has shown, China has embarked on profound changes in its 
civil  aviation  sector  including  restructuring  of  its  domestic  aviation  industry  and 
gradual market reform and opening. 

Significant efforts will continue to be necessary for the development of the Chinese 
air traffic sector to meet China’s aspirations as well as international standards. Closer 
co-operation between the EU and China is paramount and will be mutually beneficial 
and be able to contribute to the development of an efficient, robust and safe aviation 
sector. 

The  Commission  therefore  considers  it  important  to  offer  China  a  comprehensive 
scope for strengthened co-operation in civil aviation. 

Such  co-operation  must  address  and  resolve  the  legal  issues  in  relation  to  existing 
bilateral agreements between China and Member States. 

However, an agreement with China should not be limited to agreeing on Community 
designation  clauses.  It  should  go  further  and  establish  an  ambitious  framework 
integrating industrial co-operation and wider aviation issues such as co-operation in 
the  fields  of  aviation  safety,  security,  air  traffic  management,  technology  and 
research as well as “doing-business” issues. 

While ambitions should be high, a fully open aviation area with China may take time 
to  develop  and  may  best  be  developed  in  stages  to  allow  a  smooth  transition  and 
market integration based on a gradual implementation of new rules. 

The scope of the mandate that the Commission is proposing is outlined in a proposed 
separate draft Council Decision. 

To  the  extent  that  restrictions  on  traffic  rights  may  remain  under  a  future 
Community-China agreement, or indeed any other Community-wide agreement with 
a  third  country,  the  Community  will  need  to  develop  transparent  and  non-
discriminatory procedures for allocation of such limited traffic rights as negotiated at 

5.7 

6. 

6.1 

6.2 

6.3 

6.4 

EN 

10 

   EN 

 
Community  level.  Such  procedures  are  under  preparation  and  a  proposal  will  be 
submitted in the near future. 

7. 

7.1 

7.2 

CONCLUSIONS 

The  civil  aviation  sector  offers  significant  new  opportunities  for  further 
strengthening transport sector co-operation and mutual benefits of China and the EU. 
Efforts should therefore now be made for air transport to become the next key area of 
closer co-operation between the EU and China in the transport sector. 

In  the  light  of  this,  the  Commission  proposes  the  negotiation  and  conclusion  of  a 
comprehensive  open  aviation  agreement  with  the  People’s  Republic  of  China  and 
invites the Council to authorise the Commission to enter into negotiations on behalf 
of the European Community on such an agreement. 

The  Commission  will  work  closely  together  with  Member  States  and  all  relevant 
stakeholders  in  further  developing  and  achieving  the  objectives  set  out  in  the 
proposed Council Decision. 

EN 

11 

   EN