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Boeing signs with Chinese banks to buy 300 jets and set up China plant

BOEING has signed contracts to sell 300 aircraft to Chinese firms and set up an aircraft plant in China, becoming the first American firm to tie-up a deal since Chinese president Xi Jinping's state visit, Reuters reports.

The aircraft deals, potentially worth tens of billions of dollars are collectively the largest order the aerospace firm has received from Chinese companies.

China's ICBC Financial Leasing Co, a unit of the Industrial and Commercial Bank of China, on separately confirmed it will buy 30 of Boeing's 737-800 jets, worth $2.88 billion at list prices.

China Aviation Supplies Holding Company and China Development Bank Leasing are the other two customers for the aircraft, said Xinhua.

Boeing, which is in battle for plane orders with European Airbus, will build its first aircraft completion plant outside the United States in China in order to gain a foothold in that important market, say industry observers.

Boeing raised its forecast for China's aircraft demand by five per cent in August, saying that the country will need 6,330 planes over the next 20 years.

It signed a cooperation document with Commercial Aircraft Corporation of China (Comac) to build the aircraft completion centre for its 737 passenger jet in China, said Xinhua.

An aircraft's interiors and some systems are usually installed, and the plane is painted in the customer's livery, at completion centres. The final flight trials are then completed before the aircraft is delivered to the customer.

State-owned airlines like Air China, China Eastern and China Southern, and privately-owned budget carrier Spring Airlines, are growing fast and adding new planes to meet this demand for both short and long haul air travel.

Boeing's plans for an aircraft completion centre comes after Airbus signed an agreement in July to set up its second Chinese plant.