China's Shenzhou 9 spacecraft returned to Earth on Friday, ending a mission that put the country's first woman in space and completed a manned docking test critical to its goal of building a space station by 2020.

The spacecraft's gumdrop-shaped return capsule descended to Earth by parachute and touched down shortly after 10am (local time) in China's northwestern Inner Mongolia region with its three-member crew, including female astronaut Liu Yang.

Beijing has hailed the nearly two-week mission as a technical breakthrough for the country's growing space programme.

The launch, landing and docking exercises with the experimental Tiangong 1 space lab module were broadcast live on state television and met with an outpouring of national pride.

Moments after the capsule landed with a thud in the barren pasture lands, ground crew rushed to open the hatch.

The official Xinhua news agency reported the astronauts as saying: "We have returned, and we feel good."

An hour later, mission commander Jing Haipeng smiled and waved as he emerged from the capsule in his white space suit. Fellow astronauts Liu Wang and Liu Yang followed to loud applause.

Their mission marked the first time China has transferred astronauts between two orbiting craft, a milestone in an effort to acquire the technological and logistical skills to run a full space station that can house people for long periods.

The three astronauts were whisked to one side, seated in chairs and interviewed by state media.

"We are proud of the motherland," Liu Yang said.

Speaking in Beijing, Premier Wen Jiabao congratulated the crew and welcomed them home.

"Tiangong 1 and Shenzhou 9, in the task of manned rendez-vous and docking, have achieved complete success," Wen said.

"This is another outstanding contribution by the Chinese people to humanity's efforts to explore and use space."

China is far from catching up with the established space superpowers, the United States and Russia.

But the Shenzhou 9 marked China's fourth manned space mission since 2003, and comes as budget restraints and shifting priorities have held back U.S. manned space launches.

The United States will not test a new rocket to take people into space until 2017 and Russia has said manned missions are no longer a priority.

Nasa has begun investing in US firms to provide commercial spaceflight services and is spending about US$3 billion a year on a new rocket and capsule to send astronauts to the moon, asteroids and eventually to Mars.

China says it has spent about US$6 billion on its manned space programme since 1992.

Beijing plans an unmanned moon landing and deployment of a moon rover and its scientists have raised the possibility of sending a man to the moon, but not before 2020.

China is also jostling with neighbours Japan and India for a bigger presence in space, but its plans have faced international wariness. Beijing says its aims are peaceful.

- Reuters