United Parcel Service Inc. (UPS), the world's largest package delivery company, announced Thursday it would pay US$100 million to take over most of the international express delivery operations of its Chinese partner, Sinotrans Air Transportation Development Co. Ltd, Shenzhen Daily reported Friday.

The deal, which was signed Wednesday and will take effect throughout 2005, will give UPS direct control over the network, allowing it to expand its business to more than 200 cities across the Chinese mainland.

Those cities generated more than 80 percent of China's gross domestic product last year, UPS said in a statement.

The deal ended a 16-year agency relationship in which Sinotrans acted as freight forwarder for UPS in China, said Ken Torok, president of UPS Asia Pacific.

"This agreement opens a wealth of opportunity for UPS customers seeking to do business with China," said David Abney, president of UPS International.

It was UPS' latest move to race with its rivals FedEx Corp. and DHL Express to cash in on the country's fast-growing cargo market.

Earlier last month, UPS' weekly flights to China tripled from six to 18. It also plans to launch its first non-stop service between Guangzhou and the United States next year and establish a Shanghai air hub in 2007.

In the third quarter of this year, its exports volume to China surged 129 percent from a year ago, the U.S. company said without giving any specific figure.

The rate was much higher than its Asian growth of 40 percent and global growth of 12 percent, the company said.

(Shenzhen Daily/Agencies)