Aircraft manufacturer Airbus was set to win a US$7 billion Chinese order for about 100 A320 passenger jets yesterday, according to sources close to the negotiations, following a deal that could see Airbus building an assembly plant in China.
Chinese Prime Minister Wen Jiabao (溫家寶), making a four-day visit to France, was scheduled to meet his French counterpart Dominique de Villepin yesterday and then announce the aircraft orders at a joint news conference, Airbus officials said.
Wen visited the main Airbus plant in Toulouse on Sunday where chief executive Gustav Humbert signed a memorandum of understanding promising "industrial cooperation with China. And tomorrow, there is the other part of this two-way street: to have more contracts, to have more aircraft flying in China."
Airbus said the memorandum was "about cooperation between the Chinese civil aviation industry" and itself, providing "a further upgrade of the cooperation between both parties."
It also expressed hopes of further collaboration down the road, including the "possibility" of building an assembly plant for mid-range Airbus planes in China.
Officials said the exact number of planes ordered would be announced at the news conference.
The order would be worth about US$7 billion, a source close to the sales negotiations said on Sunday night.
The order will allow Airbus to bounce back from an order of 70 Boeing B737 jets that the US group notched up during the visit to Beijing by US President George W. Bush last month.
Boeing currently holds around 60 percent of the fast-growing Chinese market, with Airbus behind with about one-third of the market, but aiming for at least half.
Airbus estimates total potential sales in China over the next 20 years at 1,600 planes.
Its A320 is a medium-range, single-aisle twin-engine jet capable of carrying up to about 180 passengers, and is still the European company's most popular aircraft after 17 years on the market.
The A320 is in direct competition with Boeing's 737 model.
Currently, Airbus has a research and development center in Beijing, and five Chinese companies produce parts for Airbus aircraft.
In Beijing, the official People's Daily has quoted Airbus officials as saying the company will shift all production of high-technology wings for the A320 to China from Britain within seven years.
Noel Forgeard, a co-president of the European Aeronautic Defense and Space Company (EADS) which controls 80 percent of Airbus, said recently that EADS did not rule out building a complete assembly line in China.
China, which is recognized as being highly successful in acquiring the technologies it lacks, has imposed clear rules: penetration of its market depends on investment that is likely to develop the Chinese aerospace industry.
However, the secretary-general of French aerospace and defense equipment body GEAD, Olivier Gorge, warned in an interview last week that it was necessary "that French technology in terms of aerospace equipment does not go to China through production sub-contracting."
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