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Civil Aviation to Open Part of Its Service Sectors
China's entry to the World Trade Organization (WTO) will not have a strong impact on China's civil aviation industry, sources with the General Administration of Civil Aviation of China (CAAC) said Monday.

This is because it will only open parts of its service sectors to foreign companies after China becomes an official member of the WTO - unlike other service industries like banking and insurance.

Wu Zhouhong, an official with the International Cooperation Department under CAAC, said the formal document detailing what China has committed itself to after joining the WTO is expected to be unveiled early next month.

The aircraft Maintenance, Repair and Overhaul (MRO) is the service sector that will be opened widest to foreign companies.

Foreign firms are allowed to establish companies in China -- either in the form of joint venture or independent companies -- to operate MRO business for Chinese or international air carriers.

But this does not represent a watershed move as foreign companies have already helped establish MRO companies in partnership with Chinese airlines.

Air China and Germany-based Lufthansa Airlines established a MRO company - AMECO - in 1994 in Beijing. AMECO now provides MRO services to many air carriers who land their planes in Beijing.

Shanghai and Guangdong Province also established MRO joint ventures in the 1990s.

Wu said the MRO sector has opened to foreign companies for years and the focus would be on the redistribution of stock structure inside those MRO companies after China becomes an official member of the WTO.

Other fields such as ticket sales and seat reservation services have also taken root in China in past years, Wu said. Costumers in major Chinese cities can easily buy air tickets from foreign airlines through agents.

Wu said CAAC needs to allow foreign airlines to open more direct ticket agents in China in the months and years after the nation joins the world trade club.

WTO rules do not cover some tough issues like opening the airspace of its members, so CAAC will still have full rights to determine who can enter China's airspace.

Wu said CAAC would discuss the issue actively through bilateral negotiations with relevant members. Its attitude has been to welcome international air carriers to compete in China's aviation market.

(China Daily November 20, 2001)

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