Montreal-headquartered Air Canada and Beijing-headquartered Air China Ltd. have signed a joint venture agreement that will increase co-operation on flights between Canada and China on key connecting domestic flights in both countries. The airlines say it is the first joint venture agreement between a Chinese and North American airline. China has been a growing market for Air Canada and is set to be the world’s largest by 2022. The airlines expanded a code-share agreement in May and implemented an expanded reciprocal lounge agreement for customers in December last year. Air Canada has increased its capacity on routes between Canada and China on average by 12.5 per year over the last five years. The proposed tie-up, however, came under scrutiny in May 2018 after Air Canada decided to list Taipei, the capital of Taiwan, as part of China on its booking website, drawing a sharp reaction from Taiwan’s foreign ministry. Air Canada denied that the deal had anything to do with its recent decision to refer to Taiwan as part of China.