Global aviation major Boeing announced on Wednesday that it had struck a record deal worth $38 billion with China to make 300 planes for the country. The deal was signed during Chinese President Xi Jinping’s first official visit to the USA, during which he visited Boeing’s wide-body commercial airplane facility.
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Xi is due to visit Boeing s main airplane factory in Washington state on Wednesday, before travelling in Washington DC the following day to meet President Barack Obama at the White House.
“Boeing and China Aviation Supplies Holding Company (CASC) have signed a General Terms Agreement related to the purchase of 300 airplanes”, the release read on Wednesday.
European rival Airbus already has a final assembly operation for medium-range Airbus 320 aircraft in the northern port city of Tianjin, and plans to open a completion and delivery center for long-haul A330s. This year, a quarter of its jets have been delivered there. About 70% of those planes would be directed at growth rather than replacing older aircraft, the company said.
The center would be Boeing’s largest industrial expansion outside the U.S. Boeing will still build its best-selling jets at a plant outside Seattle, but those for Chinese customers will eventually be flown to the new plant for finishing work before delivery to local carriers. The threat was triggered by an announcement that Boeing is considering building a factory in China.
Bill Dugovich, communications director for the Society of Professional Engineering Employees in Aerospace union, said he checked Tuesday and Boeing employment in Washington was down by 3,040 since November. 2014, when the state legislature extended the tax incentive for the aerospace industry until 2040. The union represents about 35,000 Boeing workers. The new plant in China will manufacture a model of Boeing’s 737 passenger jets.
China is poised to displace the USA as the world’s biggest aircraft and travel market in two decades, according to Boeing. The leasing firms ICBC and CDB Leasing will acquire 60 of Boeing 737 aircraft under the deal.
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Also on Tuesday, the National Development and Reform Commission of China inked a Memorandum of Understanding (MOU) with the USA plane maker on the promotion of comprehensive strategic cooperation in the civil aviation industry. It predicts airlines will need to add 6,330 new planes worth $950 billion to their fleets by 2034 to accommodate the increase in number of travelers.
