Singapore's Changi Airports International (CAI) has entered into a strategic partnership with China's Shenzhen Airport Group to develop a portfolio of regional airports across China.

This is the first joint venture between Shenzhen Airport Group and a foreign counterpart, under which CAI will hold a 49 percent stake and Shenzhen will hold the remaining 51 percent stake.

CAI - the investment arm of Changi Airport - has been steadily moving to increase its penetration in the booming Chinese aviation market.

It started by providing technical consultancy services three years ago and followed that up with a 29 percent private equity stake in Nanjing Lukou International Airport in January.

Shenzhen's Baoan airport is the fourth largest in China in terms of passenger volume.

CAI and Shenzhen will be looking at identifying and investing in a few medium-sized airports in China that have strong growth potential over the next three years to help these airports improve their processes and services while maximising returns.

Chow Kok Fong, CEO, CAI, said: "Medium-sized airports with between 3 and 5 million passengers a year have regional aspirations. Some of them may want to eventually develop a small but useful international sector to bring in international traffic for the development of the tourism industry and their local economy."

When it comes to returns, CAI said it is expecting a fairly constant stream of income rather than aggressive numbers, with typical returns seen at 15 to 18 percent.

The challenge lies in being able to accurately predict growth patterns.

While growth in China's aviation sector has been explosive in recent years, there is precious little official data and CAI has to put in much effort to win over the trust of the local Chinese.

The advantage of such a joint venture, said CAI, is that it combines CAI's global expertise in running an international airport like Changi while utilising Shenzhen Airport Group's deep understanding of the Chinese aviation industry.

CAI believes that the opportunities in China are tremendous as airport development there remains highly inadequate.

China has 146 airports - far below the 5,600 in the US, which has only one fifth of China's population size.

Mr Chow said: "Ideally we want to buy into airports. We want to buy a stake into one of these airports, while we grow its business potential where we develop and improve its service quality, where we improve its processes."

"It makes no sense for us to just go to these airports, collect a fee and then walk away. We see ourselves as players where we want to have our interests aligned very much with local community, local economy and local owners of the airport."

CAI will continue to source out business opportunities in China that it can take on its own, especially as some bigger airports prefer to deal with wholly foreign entities.