ABSTRACT
This chapter first examines liberalization at the international level and then narrows the focus to consider liberalization in China's aviation and air cargo industry. The Chicago Convention of 1944 prescribed that all commercial aspects of international air transportation should be governed by bilateral air service agreements (ASAs). Airlines have to obtain rights to fly passengers and cargo to and from other countries. The ASAs usually provide carriers with unlimited service rights on any city pair between two countries, unlimited fifth freedom rights, as well as the right to determine flight frequency and fares on those routes. Tae Oum among others has pointed out the primary motivation of the American approach is to optimize its bilateral negotiating leverage to ensure leading roles for US carriers in the world air transport industry. Until the mid-1980s, the civil aviation industry was operated by the Civil Aviation Administration of China (CAAC.)
