OSAN, Nov 19: China agreed to buy 70 planes from Boeing Co. in a deal worth up to about $5 billion before discounts as US President George W. Bush prepared to lobby Beijing this weekend to slash a ballooning trade deficit.
The deal, confirmed by a US official, is good news for Bush as he starts a visit to Beijing on Saturday to cajole Chinese President Hu Jintao into helping reduce a trade deficit that could top $200 billion this year.
Asia has emerged as a battleground in Boeing’s effort to regain market share from Airbus SAS, which this year inked a similar contract to sell 10 jets to China. Airbus is controlled by European aerospace company EADS.
The rapidly expanding US-China trade deficit is a perennial thorn in the side of the two country’s relations. A senior US official said on Saturday the US Commerce Department had helped hammer out the deal.
They will purchase 70 737s from Boeing, said the US official, accompanying Bush on a four-nation tour of Asia.
We frequently advocate on behalf of American companies.
Airlines commonly negotiate discounts with aircraft manufacturers that are not disclosed. The final price would also depend on what type of 737s were to be purchased.
The order — to be shared among several carriers — marked the latest in a series of coups in Asia for Boeing, which in January signed an agreement with China worth about $7.2 billion to sell up to 60 of its newest wide-body plane, the 787.
Boeing expects China’s domestic passenger market to grow at an average annual rate of 8.8 per cent over the next 20 years.
It foresees the country picking up 2,600 commercial jet aircraft over the next two decades at an estimated cost of $213 billion at 2004 prices, underpinned by strong growth in domestic flights and annual economic growth in excess of 9 per cent.
But Saturday’s deal appeared to fall short of media reports that China would agree to buy as many as 150 of the popular family of 737 aircraft, paying as much as $6.5 billion after discounts, the South China Morning Post reported.
Beijing-based spokesman George Liu and its spokesman in Hong Kong, Mark Hooper, would not confirm the deal. —Reuters
