China may favor Europe's Airbus Industrie over rival Boeing Co in the world's second-largest aircraft market in retaliation for last month's collision of a US spy plane with a Chinese jet, the China Daily reported.
The threat comes as state-owned China Southwest Airlines (
Chinese officials "did not rule out the possibility that tensions in the relationship would affect business ties," the paper said. "Any major events between China and the US would affect the balance that the Chinese government holds in deciding whose aircraft it is going to buy."
Boeing and Airbus have both been hurt by political spats between China and its trading partners in the past. Boeing officials have said privately they worry orders may be held up because of souring US-China relations, while Airbus has previously been placed on banned import lists because of French military sales to Taiwan.
A US surveillance plane, forced to land after a collision with a Chinese fighter, remains on China's Hainan Island as US technicians determine whether it can be flown out of the country.
Ties, already strained by the earlier detention of the plane's crew, have been also been affected by new US plans to sell weapons to Taiwan and comments by the Bush administration that it will review all US-Chinese military contacts.
Still, Boeing and other US companies doing business in China said that are yet to be affected by the strained relations.
Liu Jianfeng (
"An Airbus A319 successfully performed demonstration flights in two Tibetan cities," the France-based company said in a statement last week. Officials at the CAAC and China Southwest, one of the nation's most profitable carriers, observed the test flights, which were carried out on April 27 and 28, Airbus said.
Airbus officials declined to comment on whether the company is being favored by the Chinese government.
Boeing said it also had a chance to test its aircraft in Tibet.
"We did our [demonstration] first," Boeing's Beijing-based spokesman Tom McLean said. Boeing performed the same tests with its 737 jet at the same airports in August, adding that it's "business as usual" for Boeing in China.
Both aircraft makers view China as likely to be the world's biggest market after North America in coming years as economic growth spurs demand for air travel.
China will need as many as 1,600 new aircraft over the next 20 years according to the country's government, two-thirds of which will seat more than 100 people. Airbus expects 1,570 jets to be sold in China in the period, while Seattle-based Boeing said China, Hong Kong and Macau will need 1,790 planes in the next two decades.
Other major US companies, including General Motors Corp and Ford Motor Co, said they haven't been affected by any fallout from worsening relations between the US and China.
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