Analysis of the Status and Potential of the Passenger Transport Market in China and Central Asia Inspiration for the Initiative «One Belt One Way»

Abstract

Central Asia, being an important zone in the Silk Road Economic Belt of the China Road «One Belt-One Way», is an important economic channel for China, connecting European countries by land. Transport communication is the basis of the work of the initiative «One belt-one path», therefore it is important and priority. Although the development of land connections (railways, highways) between China and Central Asia has made significant progress, passenger services, especially air passenger services, are still underdeveloped. The paper explains the state of development and existing problems of the bilateral air passenger transport market between China and Central Asia through the data analysis and policy studies of the «Bilateral Air Agreement». Three policy recommendations are put forward within the framework of the «One Belt-One Way» initiative. First, China and five Central Asian countries should use the platform created by the initiative «One Belt-One Way» to actively negotiate new bilateral air agreement between governments in the field of law, airports of general aviation, capacity and airline access to further ease regulations. Considering concerns that five Central Asian countries may have regarding the protection of their national airlines, the negotiation of an aviation agreement between China and Central Asia may use a model of negotiations between US and Canada on bilateral aviation agreement. Second, given the capacity of airports and rapid economic development of China’s second and third level cities, Governments’ preferential airport policies in China’s second- and third-tier cities could be extended to attract Chinese and Central Asian airlines to operate direct flights between these cities and Central Asia. Third, to allow and encourage private and budget airlines to enter China-Central Asia airline market. These airlines can use their own price advantages to open up new markets that are not sufficiently attractive to traditional airlines.