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Boeing delivers first 737 from China plant

December 16, 2018

About one of every four jets that Boeing builds is bound for China

Boeing has kicked off its industrial foray into China, handing over the first 737 Max completed in the country to Air China as executives looked past simmering trade tension to a $2.7 trillion market opportunity.

The jetliner was the first to be delivered outside the US by the Chicago-based planemaker, although the aircraft for all intents and purposes bore a 'Made in USA' label. It marked the debut of Boeing's plane completion and delivery centre in Zhoushan.

The completion part of the facility is a joint venture with state-owned planemaker Commercial Aircraft Corp of China Ltd.

While the plant was set in motion before US President Donald Trump was elected, the ribbon-cutting risks being overshadowed by his tit-for-tat on duties with China on products ranging from cars and machinery to pork and soybeans. A three-month truce announced earlier this month has been under threat since the arrest of Huawei's chief financial officer in Canada after the US sought her extradition on allegations of violating Iran sanctions.

The Zhoushan facility, with roots on both sides of the Pacific, is emblematic of the balancing act for Boeing in China. The planemaker sold its first 10 jets there in 1972 after President Richard Nixon arrived aboard a Boeing 707. Chinese workers at the new plant will put the finishing touches on US-built planes flown over from a Seattle-area factory, before delivering them to local customers.

'This is a really exciting point in our history to have something of this scale here,' John Bruns, president of Boeing China, told reporters on Saturday. 'It really demonstrates our commitment to this market,' he said of the Zhoushan facility.

About one of every four jets that Boeing builds is bound for China, while the country's airlines are the biggest buyers of the 737, the manufacturer's largest source of profit. China is expected to need about 7,700 commercial planes over the next two decades to connect an increasingly mobile middle class.

That represents $1.2 trillion in potential sales, while Boeing projects the demand for services from maintenance to pilot training could create another $1.5 trillion market opportunity for Boeing, Airbus SE and homegrown rivals like Comac.

Boeing eventually plans to put the finishing touches on 100 of its 737 Max planes each year at the new completion center. Bruns declined to say when he expects the facility to operate in high gear, predicting a 'gradual step up' as workers are trained. The bulk of its workforce - about 75 people - are Boeing's US employees temporarily stationed there to help new hires get up to speed.

khaleejtimes