Originally, it was the Paris Convention in 1919 that determined that foreign powers could circumvent the sovereignty of a state’s air space by setting up joint ventures with the host country. This treaty came about after considerable debate over aerial sovereignty among jurists, divided into four main opinions:
- Absolute freedom of air navigation;
- Absolute state sovereignty over air navigation;
- Vertical limits to state sovereignty, similar to maritime belts;
- Limitations on sovereignty by international law.
As a result of the Paris Convention, four major corporations had staked out unofficial spheres of influence in the Republic of China: Japan in the northeast, Germany in the north and northwest, the United States in the central plain and southwest, and finally, a domestic carrier in the southeast.
The United States had partnered with China in 1930 to set up the China National Aviation Corporation. Germany followed in 1931 with Lufthansa propping up the Eurasia Aviation Company. Lufthansa's plans seemed especially ambitious as it began testing a route from Berlin to Beijing via Baghdad and Urumchi soon after signing its contract.
Japan followed suit a year later by founding the Manchuria Aviation Company with 3.6 million yuan in capital to service its recently established client state of Manchukuo. Unlike other commercial airlines, however, Japanese firms did not maintain a strict division of civil and military functions. The Manchuria Aviation Company often transferred information, labor, or equipment for the Kwantung Army, and the sky remained militarized well after Japan secured Manchukuo.