Chinese President Xi Jinping (right) talks with Gary Locke, a former US ambassador to China (left) after arriving for a one week visit to the US, at Boeing’s Paine Field in Seattle.  Plans for a Boeing factory in China have been submitted to the government in Beijing, state-run media reported ahead of President Xi Jinping’s US visit, where he will tour one of its plants.

AFP
Seattle
 
US aerospace giant Boeing has reached deals with Chinese firms to sell 300 aircraft and set up a completion centre in the Asian country, state media and its local partner said yesterday, as President Xi Jinping began his first state visit to the United States.
The massive order, which was not immediately confirmed by Boeing, demonstrates the vital importance of the Chinese market despite a growth slowdown in the world’s second-largest economy that threatens to cut into the expansion of air travel.
The state-owned Commercial Aircraft Corporation of China (COMAC) also reached an agreement with Boeing to set up a “completion centre” in China for its narrow-body 737 airliners, Xinhua said.
It represents a step up in the US company’s competition in China with European rival Airbus, which already has a manufacturing presence in the country.
The Xinhua report, datelined from Seattle where Xi started his trip on Tuesday, gave no immediate details of the models of the planes bought by a group of Chinese companies or the value of the sale.
Xi is due to visit Boeing’s main aeroplane factory in Washington state yesterday, as he looks to highlight the economic importance of China to US firms with the countries’ political relationship beset by tensions.
“China’s rapidly growing aviation market plays a crucial role in our current and future success,” Boeing chairman Jim McNerney said in a statement issued last week to announce the visit.
COMAC confirmed to AFP that it will set up a joint venture with Boeing for interior completion, painting and other delivery support services for Chinese customers.
“This shows cooperation between Boeing and a Chinese enterprise has been lifted to a major-manufacturer level,” it said in a statement.
The wording echoes the “new model of major country relations” phrase that Chinese officials use to describe ties with the US, suggesting parity between the powers. China is expected to add 6,330 new aircraft worth $950bn to its commercial fleet by 2034, Boeing said last month in its annual China Current Market Outlook, despite slowing economic growth.
“The emerging middle class in China is helping to boost demand,” Mohshin Aziz, an analyst at Malayan Banking Bhd. in Kuala Lumpur, told Bloomberg News. “Most of the planes ordered will be for growth, and very few will be for replacement.”
A completion centre in China for the medium-range Boeing 737 will be the firm’s first outside the US. It would represent a shift in the US giant’s strategy in the crucial market, where 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 new completion and delivery centre for long-haul A-330s.
But the move could be controversial for Boeing at home. Ray Conner, chief executive officer of Boeing Commercial Airplanes, said in a memo to employees on Tuesday that it will not result in layoffs at its Washington state plant, Bloomberg News said.
A report by the Shanghai Securities News on Tuesday said plans for a Boeing facility in the eastern Chinese province of Zhejiang have already been submitted to the central government in Beijing for approval.
A COMAC spokesman declined to say where it would be located or when it would open.
But China wants some of the market to go to its own homegrown planes. COMAC is already developing a Chinese narrow-body, the C919, as well as a smaller regional jet, the ARJ21, in commercial hub Shanghai.  
The company also plans to develop its own wide-body passenger plane over the next decade in cooperation with a Russian firm, industry officials say.
It was not immediately clear whether all the 300 sales Xinhua reported were new, or if some represented confirmations or more detailed disclosures of previously announced orders. But one of the buyers, China Development Bank Leasing, said in a statement it had signed a deal for 30 Boeing Next-Generation 737-800 aircraft valued at $3bn. Other Chinese participants in the purchase deal include China Aviation Supplies Holding Co. and ICBC Financial Leasing Co, which will buy 30 Boeing Next-Generation 737s, state media said.