$1.5bn Chinese order for Airbus

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The Independent Online
Airbus Industrie yesterday won a $1.5bn (pounds 916m) order from China for 30 planes, putting the European maker on equal footing with arch-rival Boeing in Chinese sales this year.

China, the world's fastest-growing aviation market, is expected to spend more than $124bn over the next two decades on planes, buying one in 10 sold globally. Boeing has won $1.3bn in Chinese plane orders so far this year.

Aerospace analysts said that persistent friction between the US and China over human rights issues and patent-infringements had hurt Boeing, causing the Chinese to hold back on orders they might otherwise have placed with the American maker.

"There has been some slippage in Boeing's market position in China, but not because of Boeing, it's because of international politics," said Paul Nisbet, an analyst with JSA Research in the US.

Boeing supplies about 60 per cent of the aircraft flown by China's airlines. McDonnell-Douglas, which Boeing is planning to buy, is the only foreign company building complete aircraft in China.

"Certainly the recent squabbles between the US administration and the Chinese haven't helped Boeing's cause there, and have resulted in delays in some major orders," one analyst said. Industry observers also said difficulties in lining up financing and squabbling between Chinese airlines on which ones get new planes have helped slow new Boeing orders.

The order placed with Airbus was part of a clutch of aviation accords signed by French President Jacques Chirac that will produce some $3bn in exports and investment and challenge America's stranglehold on China's aviation industry. Mr Chirac is the first French president to visit China in 14 years.

Chinese officials acknowledged that France's political relations with them helped put Airbus in a position to win orders. "France is the one country with a comprehensive partnership with China," said Tang Guoqiang, a spokesman for China's foreign ministry. He noted that the only country with a similar level of partnership was Russia.

Asked whether the Airbus order represented a reward for France for treading lightly on the issue of human rights, he said the contracts "show a good relationship has developed in the political sphere between China and France.

"These agreements show China is holding a positive attitude toward the future development of economic and trade partnerships."