China is planning to build its first world-class cruise ships, with help from Carnival Corp. and Fincantieri Spa, two of the biggest names in the industry.

Carnival, the world’s largest cruise-line operator, signed a memorandum of understanding with state-owned China State Shipbuilding Corp. to explore creating a venture that would accelerate development of the cruise industry in China, according to a statement today. They may form a three-way shipbuilding partnership with Italy’s Fincantieri, the largest global builder of cruise vessels.

The alliance would speed the growth of a relatively new travel option of cruise vacations in China. Miami-based Carnival and other U.S. operators are expanding in the region, which is projected to be one of the largest cruise markets in the world with 4.5 million passengers by 2020, according to the Chinese Ministry of Transport.

“This is really a breakthrough day,” Carnival Chief Executive Officer Arnold Donald said in the statement. “This landmark agreement enables us to work closely with our partners at the China State Shipbuilding Corp. to fully explore the possibility of forming a joint venture to further develop China into a leading cruise market.”

In a possible venture, Carnival would provide ship design and shipbuilding expertise to China State Shipbuilding, leading to construction of the first world-class cruise ship built in China, according to the statement.

Donald has said the China is growing at a double-digit rate in percentage terms and could become the largest market in the world.

Carnival has deployed four ships there and last month said it would send its chief operating officer, Alan Buckelew, to Shanghai to lead efforts in developing the business there. Royal Caribbean Cruises Ltd. is also increasing its cruise offerings in the country.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Anand Krishnamoorthy

Photo Credit: Italian shipbuilding company Fincantieri will team with Carnival Corp. to help China build its first world-class cruise ship. Pictured, military ships under construction at Fincantieri's Riva Trigoso shipyards in Genova, Italy. Fincantieri. Fincantieri