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Boeing seals China plane deal during Xi visit

September 23, 2015

As president Xi Jinping toured Boeing's main US factory, the jet maker announced a $38 billion Chinese plane deal. The company is also set to part-build many of its 737s in China.

Seattle - Chinesischer Präsident Xi Jinping besucht eine Boing Fabrik
Image: Getty Images/J. Redmond-Pool

Hailing the deal to deliver 300 aircraft to Chinese airlines, Boeing's CEO Dennis Muilenburg said China was quickly overtaking the US and "becoming the largest aviation market in the world."

The giant order worth 34 billion euros ($38 billion,) was announced to coincide with President Xi Jingping's tour of a Boeing plant near Seattle. The Chinese leader began a state visit to the US on Wednesday.

The deal will be made up of 240 planes sold directly to airlines and 60 aircraft destined for leasing companies, the company said in a news release.

China Aviation Supplies Holding, ICBC Financial Leasing and China Development Bank Leasing inked the agreement after Xi's arrival in Seattle, the Chinese news agency Xinhua reported.

Xi told hundreds of Boeing employees at the factory that he sees bright prospects for future collaboration between China and Boeing.

China Airlines plane
Passenger numbers among Chinese carriers hit 100 million passengers for the first time earlier this yearImage: picture-alliance/dpa/ Z. Shuai

Boeing and a state-owned Chinese partner, Commercial Aircraft Corporation of China, will also build an aircraft assembly plant in China, where the 737 jet will be produced. Known as a completion center, it would finish, paint and deliver 737s built in the US.

Wednesday's deal was quickly lambasted by Republican presidential front-runner Donald Trump, who said the planned new facility in China could hurt American jobs. But the company said its plans in Asia would not lead to layoffs at home.

Analysts say Boeing is attempting to match its European rival Airbus' presence in China, after it opened its first assembly line outside of Europe in Tianjin in 2008. In July, Airbus agreed to build a second completion and delivery centre for A330 jets in China.

Boeing predicts within 20 years, the Chinese market will be worth around $950 billion.

Shares in the jet manufacturer fell 1.5 percent to $132.05 in afternoon trading in New York on Wednesday.

mm/bw (AP, dpa, Reuters)