Cathay Pacific Airways Ltd will resume its service to Shanghai and increase flights to Beijing under the new air services agreement signed between the Hong Kong and Chinese governments, The Standard reported, citing Hong Kong's Secretary for Economic Development and Labor Stephen Ip Shu-kwan.

Cathay stopped its service to Shanghai in 1990, but it has since applied to Chinese authorities for a resumption of flights.

The new air services agreement is expected to pave the way for the resumption of Cathay's service to Shanghai.

Under the terms of the new agreement between Hong Kong and China, each side will be able to designate up to four airlines to operate starting October 2007 passenger and/or cargo flights serving 49 of 56 destinations in mainland China.