BEIJING (AFX) - China's air cargo market is the fastest growing in the world, and is expected to outpace passenger traffic, asthe country's role as manufacturer to the world fuels strong demand for freight transport, air transport industry officials said.

In 2004, China's airlines transported 2.76 mln tons of cargo, a 13 pct increase from the previous year, according to the Civil Aviation Administration of China (CAAC).

In just five years, the CAAC estimates, annual cargo throughput will double.

Demand for cargo traffic is rising so fast in mainland China that its fleet is currently unable to keep up, industry officials said.

"You have a growing need for domestic freight movement. Most of it is being moved on the belly of passenger planes, but there will be a growing need for designated freighters," said Laurence Barron, president of Airbus China Ltd.

According to European airplane maker Airbus' research, air freight traffic from China to the US and Europe will lead the rapid increase in air cargo shipments from Asia, which will be the fastest growing region in the next two decades.

Strong domestic consumption and rapid economic growth is also fueling busy freight traffic within China, analysts said.

China's domestic air cargo market is expected by industry leaders to rise at an annual rate of about 10 pct in the next two decades, faster than the worldwide average of 6.2 pct.

By 2023, traffic from China to North America and from Asia to North America will have surpassed today's second largest freight market of Europe to North America, according to Airbus' latest Global Market Forecast.

Global airplane manufacturers estimate China will need a fleet of 240 to 260 freighters by 2024.

Compared to the North American domestic market, which is currently served by a fleet of 770 freighters, China's is served by fewer than seven dedicated freighters, with the majority of air freight carried below deck on scheduled passenger flights, Airbus said.

In one example of the growing appetite for freighters, China-based Jade Cargo International put in a firm order for six 747 freight planes from Boeing Co last month, with the price tag at 1.3 bln usd.

"China is a key manufacturing center for the world, producing a number of high-value goods that are good candidates for air shipment," said Rudolf Tewes, general manager of Jade Cargo, a joint venture by Shenzhen Airlines, Lufthansa Cargo AG and German investment firm DEG.

Already, China is setting its sights on becoming an Asian regional hub in passenger and freight transportation.

Not long after Guangzhou's new international airport, China's biggest, opened in August 2004, it vowed to rob rival Hong Kong of its status as southern China's air hub through a tie-up plan with other regional airports.

"We want to be the hub airport of southern China," Zhang Kejian, vice-president of Guangdong Airport Management Corporation which runs the city's Baiyun International Airport, said last November.

Hong Kong's Chek Lap Kok airport, opened in 1998, currently handles three mln tonnes of cargo, more freight than any other in the world.

However, the 2.4-bln-usd Baiyun Airport is working hard to catch up. Zhang said that it was well on the way to achieving its target of a million tonnes of cargo in its first year.