China could buy up to 750 Boeing jets in potential deal of decade
China has agreed to purchase 200 Boeing aircraft, U.S. President Donald Trump said. According to him, the order could eventually expand to as many as 750 jets.
Reuters reports that details have not yet been disclosed: it remains unclear which aircraft models China plans to buy and when deliveries could take place. But if the order is finalized, it would become Boeing’s first major deal with China in nearly a decade. In recent years, the U.S. aircraft manufacturer has effectively been shut out of the world’s second-largest aviation market due to trade tensions between Beijing and Washington.
From 2005 to 2017, Chinese airlines ordered an average of 127 Boeing aircraft per year. Since then, that figure has dropped sharply to around six jets annually.
According to sources, ahead of Trump’s meeting with Chinese President Xi Jinping, the two sides discussed a potential order for about 500 aircraft. If the deal exceeds that level, it could become the largest in aviation history, surpassing IndiGo’s agreement to buy 500 Airbus narrow-body jets. The Chinese order would likely be split among the country’s three largest state-owned carriers.
Deal prospects
For China, such a deal would provide additional capacity to support the growth of its aviation market. This is especially important as production of the domestically developed COMAC C919 narrow-body aircraft has so far fallen short of Beijing’s ambitious targets.
For Boeing, the agreement would also be an important opportunity to narrow the gap with Airbus, which has significantly strengthened its position in the Chinese market in recent years.
Amid reports of the possible deal, Boeing shares had earlier fallen nearly 4% after Trump cited the figure of 200 aircraft — a number that came in below analysts’ expectations. In Friday premarket trading, the company’s shares were down about 1%.
Boeing CEO Kelly Ortberg and GE Aerospace CEO Larry Culp were part of the group of American executives who accompanied Trump to China. Their participation was linked to hopes of securing major deals and resolving business disputes.
For Trump, a potential agreement with China could become an important political victory. His tough tariff policy and other trade measures have so far failed to significantly reduce the large U.S. trade deficit.
Leaders of the aircraft manufacturing market
The global passenger aircraft market is effectively controlled by two major manufacturers — America’s Boeing and Europe’s Airbus. For decades, they have divided between themselves the main demand for narrow-body and wide-body jets used by the world’s largest airlines.
Against this backdrop, China’s large order matters not only for Boeing, but for the entire aviation market. In recent years, Airbus has notably strengthened its position in China, while Boeing has faced the consequences of trade tensions, safety issues, and delivery delays. As a result, a potential deal for hundreds of aircraft could help the U.S. manufacturer regain some of its lost ground and intensify competition with Airbus in one of the world’s most promising markets.
As a reminder, market participants believe that Boeing shares could rise significantly if the deal is successfully completed.
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