ARLINGTON- Boeing has secured an agreement from China to purchase 200 commercial jets, marking the country’s first purchase of U.S.-made commercial aircraft in nearly a decade.
US President Donald Trump announced the deal to Fox News Channel on Thursday, though the figure falls well below industry expectations.
The order is far fewer than the 500 jet deal that industry sources said had been under discussion.
It is also far fewer than the number of new aircraft Chinese airlines need to keep up with the country’s booming demand for air travel.
Boeing shares fell nearly 4% following reports of the agreement, trading down 3.8% by 1400 ET, as the planemaker works to regain ground in China against rival Airbus.
Boeing Attempts China Market Comeback
The agreement represents a notable shift after years of strained trade relations between Washington and Beijing.
China’s last major Boeing order came in November 2017, when Beijing agreed to buy 300 aircraft during Trump’s trip to the country that year.
No details about the current deal were immediately available. It remains unclear whether Trump was referring to single-aisle 737 MAX aircraft or the larger, much more expensive twin-aisle 777X or 787 jets used on long-haul routes.
Boeing CEO Kelly Ortberg and GE Aerospace CEO Larry Culp were among the group of American executives who accompanied Trump to China, one of the world’s largest commercial aviation markets.
The group aimed to clinch deals or resolve ongoing business disputes during the visit.
Why Boeing Lost Its Lead in China
Boeing once dominated the Chinese market, but several factors eroded its position after 2017. Subsequent trade disputes between the two countries effectively shut Boeing out of the world’s second-largest aviation market.
The 737 MAX crisis added further damage. Two fatal crashes led to the worldwide grounding of the aircraft, and later production problems at Boeing created additional setbacks.
The fallout between Beijing and Washington, combined with these issues, allowed Airbus to cement its lead.
The European planemaker had already been aggressively courting Chinese airlines. Airbus embedded itself into Beijing’s political economy by opening an A320 final assembly line in Tianjin in 2008.
Since 2018, Airbus has outpaced Boeing in Chinese deliveries and secured the majority share of the market.
Market Too Large for One Supplier
China’s aviation market remains too big to depend on a single planemaker. The country will require at least 9,000 new jetliners by 2045, according to market projections from both Boeing and Airbus.
Trump has aggressively pushed countries during trade talks to boost their purchases of Boeing airplanes.
A Boeing deal had been in talks for many months, but geopolitical tensions, trade disputes, and fights over intellectual property of advanced aerospace components foiled earlier attempts to close an agreement, according to industry sources familiar with previous negotiations.
Ortberg told Reuters last month that he was counting on the Trump administration’s support to seal a major deal with China.
The 200 jet order, while smaller than hoped, gives Boeing a foothold in a market it has struggled to access for years.
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