Shareholders of Air China and Cathay Pacific Airways have agreed to forge strategic ties for expansion in the Mainland, Bloomberg reported. Air China Ltd. Chairman Li Jiaxiang agreed to sell the airline's Hong Kong unit to Cathay Pacific Airways Ltd. for 1.58 billion HK dollars (203 million US dollars). In exchange for access to China's growing domestic market, Cathay agreed to a partnership with Air China that will help the Beijing-based carrier glean management and technical expertise from Cathay, Asia's second-most profitable airline, said Bloomberg. The agreement may provide a model for Chinese companies to expand through links with overseas rivals, after outright takeovers disappointed investors. Lenovo Group Ltd., which bought International Business Machines Corp.'s personal-computer unit last year, posted an 89 percent drop in first-quarter profit, partly because of costs from cutting jobs at the PC unit. ``This sets a precedent for other state-owned companies to get into international firms so they can better understand the inner workings of a global company,'' says Jeanette Chan, who specializes in China mergers at the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP in Hong Kong.