The Australians have a clear goal – to make China, now its fourth largest market for visitors, its top source by 2020. To do that, it unveiled its China 2020 Strategic Plan at the inaugural Australia-China Tourism Summit held in Cairns yesterday.

The Chinese meanwhile count Australia as its 10th largest market and it is clear that through the memorandum of understanding signed between the two governments in Cairns, they hope more Australians will visit China in the next few years.

Dr Du Jiang, vice chairman, Chinese National Tourism Administration, called it a two-way street and said he hoped both countries can work on cultural tourism as one of the pillars of exchange.

Later Professor Dai Bin of the Chinese Tourism Academy noted that China has a US$6 billion tourism deficit but said it is prepared to “endure” it for the sake of good neighbourliness.

The desire to engage was most evident during the airline panel. Three of China’s major airlines – China Southern, China Eastern and Air China – were there to underscore their longterm commitment to Australia and to expand routes to regional gateways beyond the main cities.

While Derek Sadubin, chief operating officer of the Centre for Asia Pacific Aviation, said that international was “small fry” for the Chinese carriers – representing only eight percent of their total business (in comparison, the US split is 89% domestic: 11% international), it is clear the Chinese airlines are looking to expand internationally out of necessity. Their domestic business is facing stiff competition from the high-speed rail network being built in China and they’ve had to cut some domestic services.

As He Zongkai, executive vice president of China Southern said, we’d love to focus on domestic but we have to look for routes where they can’t build rail – so between Australia and China, hey, that’s a no-brainer.

He said that by 2015, CSA, which now flies 24 weekly flights to Australia, would operate more than 100 roundtrip flights a week – equal to about 15 flights a day – to Australia. It would add more destinations such as Perth, Cairns, Gold Coast and Adelaide, he said, raising the pulses of delegates from those areas. To date, he said, CSA had carried 178,000 passengers to Australia.

These new Australian routes would then form the platform of expansion for its Kangaroo Route as it develops its European routes in parallel.

“We intend to compete on the Kangaroo Route,” he declared, saying the airline would add Paris, Amsterdam and London to its network, and take advantage of its Skyteam alliance to provide convenient connections.

While he tipped his hat to hub competition from Hong Kong, Singapore and Dubai, he said Guangzhou had more natural advantages on this sector than airports in Japan, Korea and Shanghai.

Ma Ling, Air China’s deputy managing director, international affairs and cooperation, Air China was not about to take this sitting down. Air China is the biggest airline to Sydney and Melbourne from Beijing and Shanghai with 4,500 seats a week and 18 flights a week, she said.

It intends to build Beijing, Shanghai and Chengdu as hubs to feed traffic to Australia. Particularly lucrative is the student market, with 130,000 Chinese students registered in Australia in 2010.

A total of 42,359 passengers transited via Beijing and Shanghai in 2010 to Australia. Madam Ma then called on Australia to waive visas for Chinese travellers in transit in Australia.

China Eastern’s Sydney-based Cathy Zhang Xiaoxi (pictured) said her airline, which is also celebrating the Skyteam alliance, would be offering more connections via Shanghai. “We want to develop more routes to Australia,” she said. On June 20, the airline starts daily flights to Melbourne and Sydney.

For Sadubin, the opportunity for Australia to grow its Chinese market is through the regional airlines and he suggested working with airlines in Hainan for instance to open up direct air access to provincial China.

Low cost longhaul airlines such as Jetstar and AirAsia X have proven that point-to-point flights work in opening up regional markets. “The fact that Singapore Airlines is starting a new low cost longhaul airline is proof that there is something there,” he said.

He shared one interesting statistic – in 2006, Qantas was the 38th biggest carrier to China; now it’s 61st. Australia, he said, had been outperformed by North America, Canada and others in terms of capacity share in China.

For the Chinese airlines though, it is clear that Australia has to be part of their longterm strategy. Asked which routes were profitable currently, Zhang said only Sydney and Melbourne were, “the rest are in the red”.

Well, as the famous proverb by Lao Tze goes, “The journey of a thousand miles begins with a single step” and it is clear that, even after 12 years of Australia being granted ADS – the first Western country to be so bestowed – this inaugural Summit may just be the second step to the long climb up the Golden Mountain of Prosperity for both countries.