Boeing Right About China All Along, Gets $38 Billion In Order And Commitments
Recently, Boeing Co had welcomed China’s President Xi Jinping to its widebody commercial airplane factory, ushering in new orders and commitments for as much as 300 Boeing narrow body and wide body aircraft. At list prices, these orders are valued at approximately $38 billion. Just last month, Boeing had predicted that China will soon require 6,330 new airplanes over the next 20 years. Therefore, Jinping’s recent visit may signify a deal between China and Boeing that may be worth as much as $950 billion in the coming years.
President Xi Jinping was actually hosted at Boeing’s factory in Everett, Washington. The site is of great importance to Boeing as this is the largest production site where commercial aircraft such as the 747-8, 767, 777 and 787 Dreamliner are readily made. Accompanied by Boeing executives, President Xi Jinping actually got to view the final assembly lines for the 787 Dreamliner, 777 and 747-8 as well as the aircraft components that are made by Chinese aviation suppliers.
The order for 300 airplanes worth $38 billion is actually stated in the General Terms Agreement signed by both Boeing and the China Aviation Supplies Holding Company (CASC). Moreover, the said order specified 240 airplanes for Chinese airlines. This would include 190 737 aircraft as well as 50 wide body aircraft. Meanwhile, 60 more 737 aircraft are also part of the order for leasing companies such as ICBC and CDB Leasing.
Meanwhile, Boeing also said that it looks to open a facility in China in partnership with Commercial Aircraft Corporation of China, Ltd. (COMAC). The new facility is meant to service the interiors completion, paint and delivery of Boeing 737 aircraft that are meant for Chinese customers. Moreover, Boeing is also quick to assure that the opening of the facility will not reduce the 737 Program employment in Washington State. Instead, it hopes that the new facility will help increase the production rate of Boeing 737’s final assembly factory in Renton, Washington.
To further strengthen its partnership with China, Boeing had also signed a Memorandum of Understanding (MOU) with the National Development Reform Commission (NDRC) recently. Part of this agreement is a commitment towards developing sustainable aviation biofuel using China’s agricultural waste, including corn cobs and wheat stalks. Studies made by the U.S. Department of Energy have found that aviation biofuel can possibly reduce carbon emission by 50 to 80 percent on a lifecycle basis.