China has upgraded its air passenger growth forecast for 2010, as predicted by CAPA, reflecting a better than expected recovery in international markets and sustained growth domestically. The CAAC is now predicting a 16% increase in total traffic this year to 266 million passengers, up from an earlier 13% growth estimate. Chinese airline profitability continues to soar in 2010, reflecting the economic boom and strong yuan. And despite a surprise 0.25% interest rate hike by China on 19-Oct-2010 (as authorities in Beijing seek to address rapid economic growth and a rising yuan), the airline traffic and earnings outlook remains robust.