Short on capacity and financial clout, China's airlines are feeling the pressure as talks have resumed between China and the US about an expanded air services agreement.

"We don't want Beijing to open the air transport market too fast. The pact covering an increase of air services signed in 2004 has already exerted great pressure on us," China Eastern Airlines President Li Fenghua told China Business News.

He also noted that "it takes time to integrate China's culture and service concept with international standards," pointing out that the country's airlines lag far behind US counterparts in many aspects including sheer size, financial strength, marketing expertise and management experience.

Compared with US airlines, China's carriers have found operating services to the US difficult. Air China President Cai Jianjiang acknowledged that CA has suffered heavy losses on US routes, pointing to the use of long-haul aircraft paid for in US dollars, the fact that American passengers are partial to US carriers and management issues as reasons.

In order to reverse its inferior position, CA invested 688 million yuan (US$88.9 million) to reconfigure its cabins with new first and business class seating. It also expects its impending membership in Star Alliance to "bring some hope."

China's airlines are moving very slowly to increase US service. At present, there is almost no service to the Central US and just two, Shanghai Airlines and Yangtze River Express, have been added to the list of approved carriers since the signing of the 2004 agreement. They both operate cargo services. China Eastern did launch flights to New York JFK late last year.