US Transportation Secretary Mary Peters said earlier during a Chinese tour that the US is seeking an "open skies" agreement with the world's most populous nation similar to the recently agreed US-EU accord and hopes to have "the basic framework" for a deal in place next month.

"I do believe that we can reach a meaningful agreement by May [when Chinese Vice Premier Wu Yi and US Treasury Secretary Henry Paulson are scheduled to meet in Washington]... and then consummate that agreement, we would hope, by the end of the calendar year," Peters said. She expressed the sentiments both in speeches and at press briefings during a tour that took her to Shanghai for the signing of an agreement establishing UPS's new China air hub and to Beijing for talks with transport officials.

The two nations reached an accord in 2004 that expanded passenger services and cleared the way for US cargo carriers such as UPS and FedEx to establish air hubs in China without being subject to restrictions. Both plan to have hubs operational next year, with FedEx based in Guangzhou and UPS in Shanghai.

Peters said she wants to see regulatory barriers for passenger services lowered as well. "Demand for nonstop US-China service is there, but unfortunately the supply is not," she said.

Pointing to gains resulting from the 2004 agreement, she noted that "the number of passengers traveling between China and the United States [in 2006] was more than double the 2003 level. Airfreight volumes also have taken off dramatically, rising from about 270,000 tons in 2003 to almost 400,000 tons in 2006."

She said a broader agreement would have benefits for both nations. Her comments came in the wake of growing tension between the US and China in other economic sectors, signaling that air transport is an area where US officials believe headway can be made despite other points of dispute.