Chinese Economics Thread

[Blackstone]

@Zool- yup, I've made some of the same points too in other threads. History is important and no one should forget them, but they must be presented in balanced ways and within context of discussions, and not merely to cherry pick for cheap points.

 

[Blackstone]

The siren calls of China's exploding consumer and service markets are simply too lucrative and irresistible, that's why Boeing will bend over and take it from Beijing. Look for other US, EU, ROK, Japan, and Australia-based corporations to bend knees too.

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SEATTLE - China will buy 300 Boeing aircraft and build an aircraft completion plant in China, the official Xinhua news agency said Wednesday.

The massive deal was announced as President Xi Jinping makes his first state visit to the U.S. The orders include 190 of the 737 model aircraft and 50 widebody planes for Chinese airlines, and 60 single-aisle planes for leasing companies, according to Bloomberg.

China Aviation Supplies Holding Company, ICBC Financial Leasing Co., Ltd., and China Development Bank Leasing with Boeing, will be purchasing the planes.

Hours after the Boeing deal was announced, Xi will tour the company's Everett, Wash. plant where the Dreamliner 787 is built. Long-haul flights for the 787 and 777-300ER are expanding at a double-digit rate for China, which has opened 30 routes of at least 3,500 miles since 2013, according to Boeing.

Boeing has projected it could sell China 6,330 planes worth $950 billion during the next 20 years. Nearly three-quarters of the planes will be single-aisle, with about 700 wide bodies. Passenger traffic is projected to grow 6.6% per year during that time, and air cargo 7%.

“China is obviously a critically important region for Boeing,” said Henry Harteveldt, co-founder of Atmosphere Research Group, a travel and airline research company based in San Francisco.

China decides which companies to buy planes based on objective factors such as cost and operating performance, but also on politics.

The market is "hotly contested" between the world’s two largest airplane manufacturers, Boeing and Airbus, the European airplane consortium, Harteveldt said.

Typically China tries to balance its orders between the companies, said Richard Aboulafia, an analyst on commercial and military aircraft issues for the Teal Group in Fairfax, Va.

“The government likes it for diplomatic reasons," Aboulafia said. "The airlines like it to keep [the manufacturers] competitive."

Airbus has had a final assembly plant in Tianjin, China since 2008. It was expanded in 2014.

Boeing signed an agreement with Commercial Aircraft Corporation of China Ltd. to build an aircraft completion center in China for Boeing 737s. Single-aisle planes are important for domestic and regional flights as more low-cost carriers enter the market, according to Boeing.

This will be Boeing's first non-U.S. plant. It will be responsible for completion and handover work for customers, Xinhua reported.

 

[Equation]

@Zool- yup, I've made some of the same points too in other threads. History is important and no one should forget them, but they must be presented in balanced ways and within context of discussions, and not merely to cherry pick for cheap points.

Does that mean Huawei and ZTE won't have to answer to US Congress about "national security concerns" whenever they want to expand their business over in the US into other IT products and services?

 

[Blackstone]

Does that mean Huawei and ZTE won't have to answer to US Congress about "national security concerns" whenever they want to expand their business over in the US into other IT products and services?

IMHO, Huawei, ZTE, or any other foreign companies from any nation don't have to answer to US Congress or US laws, but they don't get to do business in the US either. It's their choice. Of course, the reverse is also true for US companies operating in foreign lands. Turnabout is fair play.

 

[Jeff Head]

CUT as in STOP he pure OpEd, OT, ideologically oriented, and particularly the racism talk.

These are all two edged swords and any modicum of common sense will tell you where such talk leads.

To flame bait (which I view the racism as), arguments, anger, insults, and bedlam on SD.

This is a DEFENSE FORUM, not some historical socio-psych analysis forum.

ANY MORE RACISM FLAME BAIT WILL LEAD TO IMMEDIATE SUSPENSIONS.

Consider this the warning.

The others will lead to warnings.

DO NOT RESPOND TO THIS MODERATIN

 

[Qi_1528]

I suspect Boeing's sales projections in China might be being a bit optimistic with the country getting its own domestic passenger plane industry going. It'll be a long time before the Chinese are building anything which could compete with the dreamliner, but the smaller domestic planes are already facing local competition.

 

[Zool]

I suspect Boeing's sales projections in China might be being a bit optimistic with the country getting its own domestic passenger plane industry going. It'll be a long time before the Chinese are building anything which could compete with the dreamliner, but the smaller domestic planes are already facing local competition.

I think that's where the to-be-announced Boeing Finishing Plant (first outside of the US) for the 737 in China would make the difference. It will provide jobs, training and likely service other regional 737 buys outside of China.

 

[broadsword]

Anyway enough of the OT rants. Looks like China manufacturing is back in business with the use of robotics manufacturing. Just in time for upcoming holidays babe!

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To add to Equation's post.

China's auto industry was the trailblazer for automation, but other industries are rapidly adopting the technology as robots become smaller, cheaper and easier to use. It now only takes on average 1.3 years for an industrial robot in China to pay back its investment, down from 11.8 years in 2008, according to Goldman Sachs.

Just imagine how much more they could save if they were using homegrown robots.

 

[Blackstone]

I suspect Boeing's sales projections in China might be being a bit optimistic with the country getting its own domestic passenger plane industry going. It'll be a long time before the Chinese are building anything which could compete with the dreamliner, but the smaller domestic planes are already facing local competition.

Even if the C-919 is successful, it'd take many years to fulfill airline demand for jets, so I could see several hundred 737s sold.

 

[Blackstone]

I think that's where the to-be-announced Boeing Finishing Plant (first outside of the US) for the 737 in China would make the difference. It will provide jobs, training and likely service other regional 737 buys outside of China.

It isn't just 737s, Airbus has factories in China now too. More proof of the golden rule that those with the gold make the rules.