This news came out in China on Friday. There are currently nine major/regional carriers in China. The plan is to consolidate them into three major groups. If this happens, I would suspect that oneworld or Star Alliance will finally be able to add a Chinese partner in about one year.

April 30, 2001
China Unveils Its Planned Pairings
For Coming Airline Consolidation
By Zach Coleman
Staff Reporter of The Wall Street Journal
China's aviation authority has taken a big step toward consolidating the nation's airlines by selecting the lineup of carrier combinations.

Under a plan unveiled by the Civil Aviation Authority of China, the restructuring of the industry would leave China Southern , based in Guanzhou, as the nation's largest carrier. China Southern would be matched with China Xinjiang Airlines, a well-run carrier saddled with some of China's last Soviet-built aircraft. China Southern would also be combined with China Northern Airlines, which is burdened with debt and whose large fleet has no aircraft models in common with China Southern's.

China Eastern , based in Shanghai, would link with profitable China Yunnan Airlines and with China Northwest Airlines, which is struggling. China Eastern's parent company is already in the process of acquiring Air Great Wall, one of 10 airlines -- including six of the largest -- that are regulated and controlled by Aviation Authority. China Eastern's unhappiness with an earlier consolidation plan that didn't give it China Yunnan reportedly led to postponement of an airline summit with in January.

Seeking to produce stronger, internationally competitive carriers, and to create market stability as a prelude to deregulation, the Aviation Authority in July renewed its four-year-old call for the airlines to merge into groups headed by the three biggest carriers: Air China, China Southern Airlines and China Eastern Airlines.

full story at: http://public.wsj.com/sn/y/SB988564868789157767.html (public access)