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Mon, Nov 21, 2005 - Page 12 News List

China plans to purchase 150 Boeing aircraft

GROWTH MARKET The announcement came alongside a visit by the US president, who yesterday urged Beijing to continue with its currency reforms


China has signed a deal to buy 70 Boeing 737 airliners with a catalog value of US$4 billion and will soon agree to purchase 80 more, the government said yesterday during a visit to Beijing by US President George W. Bush.

Beijing often announces large purchases of US airliners in connection with visits by US leaders in an effort to mollify Washington's frustration at China's surging trade surplus.

The deal was announced by the official Xinhua News Agency as Bush met yesterday with Chinese President Hu Jintao (胡錦濤).

Xinhua gave only the catalog value of the planes and didn't say what Chinese carriers would pay for them.

Buyers usually receive big discounts on such large orders.

They are to be delivered between next year and 2008 to Chinese carriers Air China, China Southern Airlines, China Eastern Airlines, Shanghai Airlines, Xiamen Airlines, Shandong Airlines, Hainan Airlines and Shenzhen Airlines, according to Xinhua.

It said the planes were being bought on behalf of the airlines by a state-owned company that imports aircraft.

That company "will soon sign another purchase agreement with Boeing for 80 more B737 aircraft," Xinhua said.

Trade surplus

Hu told Bush that China would take steps to reduce its trade surplus with the US but didn't discuss specific measures.

China's trade surplus with the US hit a record US$162 billion last year and is expected to pass US$200 billion this year.

In his weekly radio address on Saturday, Bush said that increased access to foreign markets for US business, farmers and services was the top goal of his current Asia tour.

"When I met with President Hu in New York earlier this year, he said that China would bring more balance to our trade and protect intellectual property rights," Bush said from Beijing.

Currency reform

"I welcomed those commitments, just as I welcomed China's announcement in July that it would implement a flexible market-based exchange system for its currency," Bush said.

"These statements are a good beginning, but China needs to take action to ensure these goals are fully implemented," he added.

After a meeting with Bush yesterday, Hu said that China will "unswervingly" press ahead with currency reform.

"We will follow the principles benefitting not only China but also the world at large and unswervingly press ahead with reform of the exchange rate mechanism for the renminbi," Hu said in a statement.

Hu did not elaborate on any details or timing of further currency reforms China intended to implement.

China is a key growth market for Boeing and its European rival, Airbus Industrie.

Boeing says it expects Chinese carriers to buy more than 2,600 new aircraft worth US$213 billion over the next two decades as the country's economy grows and more people travel.

It says it hopes that the single-aisle Boeing 737 jet, which carries about 150 passengers, will make up the bulk of China's new purchases.

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