China has agreed to buy 200 Boeing aircraft, according to U.S. President Donald Trump, but the number came in lower than what many analysts and investors had expected. Details of the agreement were not immediately available, including the aircraft types, delivery schedule, and which Chinese airlines would receive the jets.
Trump announced the figure after meeting Chinese leader Xi Jinping on Thursday. Before the meeting, people familiar with the discussions said a larger package of around 500 Boeing aircraft had been under discussion, including 737 MAX jets and possible widebody aircraft later.
“One thing he agreed to today, he’s going to order 200 jets … 200 big ones,” Trump said on Fox News’ Hannity, referring to Xi.
Boeing shares fell 4.1% during market trading after the announcement. The lower number appeared to disappoint investors who had expected a larger order from the summit.
China remains a major market for aircraft makers
The Boeing agreement was one of several business deals expected from the meeting. The talks also came as the United States and China worked to extend a trade truce reached last October, when Trump suspended very high tariffs on Chinese goods and Xi eased restrictions tied to rare earth supplies.
China remains one of the most important aircraft markets in the world. Boeing and Airbus have been competing closely for sales there, especially as Chinese airlines prepare for long-term growth in passenger demand.
Airbus gained more ground in China during the 2010s and opened an A320 final assembly plant in Tianjin. China has also been discussing a large aircraft deal with Airbus, which could be similar in size to the package earlier expected from Boeing.
Analysts say China needs to order from both manufacturers to support future demand. Many expect the country to need as many as 1,000 new aircraft soon. Boeing and Airbus market forecasts also project that China will require at least 9,000 new jetliners by 2045.
Aircraft orders are often tied to diplomacy
China’s last large Boeing order was announced during Trump’s November 2017 visit to Beijing, when the country agreed to buy 300 Boeing jets. After that, relations between the two countries weakened. Boeing has received only 51 China orders since then, most of them for freighters.
Aircraft purchases by Chinese airlines usually require central government approval, and major announcements often happen during diplomatic visits. The airline that will operate the aircraft may also remain unclear until closer to delivery.
Matt Akers, an aerospace investment analyst with BNP Paribas, said investors had been hoping for a bigger result from the meeting.
“It’s possible we still get more orders this trip, but right now investors are interpreting this as being less than hoped for,” he said.
Boeing CEO Kelly Ortberg and GE Aerospace CEO Larry Culp were among the American executives who joined Trump in China. Ortberg said last month that he was counting on support from the Trump administration to help secure a major aircraft deal with China.
Source: Reuters
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