Budget airline AirAsia plans to enter the Chinese market, by setting up a new low-cost carrier in the central eastern city of Zhengzhou.

The Malaysian airline signed a joint venture agreement with the government of Henan province and Everbright, a Hong Kong- based financial services company on Sunday.

AirAsia wants to expand to China, which is set to become the world’s biggest aviation market within the next decade, overtaking the US.

China’s domestic flights market alone is growing at a fast rate according to Civil Aviation Administration of China figures.

Last year there were 487m domestic flights in China, up from less than 4m in 1982.

“This Chinese venture represents the final piece of the AirAsia puzzle,” said chief executive Tony Fernandes.

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China would close “the loop on all major territories in Asia Pacific,” he added.

AirAsia currently operates in Malaysia, Thailand, Indonesia, Japan, Philippines and India.

Investing in China’s aviation infrastructure and launching an academy to train pilots, crew and engineers will be part of AirAsia’s broader plans in the country, the airline said.

AirAsia announced the joint venture proposal during the Silk Road summit in Beijing, promoting China’s $124bn Belt and Road initiative to expand trade links between Asia, Africa, Europe and beyond.