China inks deals worth $38 billion to buy 300 Boeing jets

AP News
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Posted: Sep 23, 2015 5:34 PM

HONG KONG (AP) — Boeing said Wednesday that Chinese companies have agreed to buy 300 jets and build an aircraft assembly plant in China. The deals, worth about $38 billion, were signed during Chinese President Xi Jinping's visit to the United States.

China Aviation Supplies Holding Company, ICBC Financial Leasing and China Development Bank Leasing inked the jet purchase agreement after Xi's arrival in Seattle. Boeing said the orders were mostly for its 737 models.

State-owned Commercial Aircraft Corporation of China, which is better known as Comac, also signed a cooperation agreement with the U.S. plane maker to build a 737 aircraft assembly center in China. Boeing said the new facility will paint the jets and finish their interiors.

Xi visited Boeing's Paine Field assembly plant during the Seattle leg of his trip before moving on to Washington, D.C., to meet President Barack Obama.

The assembly plant would be Boeing's first in China and signals its attempt to match its European rival Airbus's Chinese presence as the two rivals step up their efforts to win more business in the country's lucrative aircraft market. Boeing said the Chinese facility won't reduce employment levels at its plants in Washington state.

Airbus opened its first assembly line outside of Europe in 2008 with a Tianjin facility that turns out four A320 aircraft per month. In July, Airbus signed a deal for a second completion and delivery center for A330 jets.

Boeing, based in Chicago, sold a record 155 airplanes last year to customers in China, and so far this year, a quarter of its jets have been delivered there. The company predicts that over the next two decades China will overtake the U.S. as the world's biggest plane market with demand for 6,330 new airplanes worth an estimated $950 billion.

Shares of Boeing Co. fell $2.32, or 1.7 percent, to close at $131.67 Wednesday.