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Big Boeing deal announced in China isn't much of a big deal

Dominic Gates, The Seattle Times on

Published in Business News

SEATTLE –– The announcement Tursday by President Donald Trump and President Xi Jinping in China of an order for 300 Boeing jets with a list price of $37 billion is the usual fake news out of state visits to China.

According to a person familiar with Boeing's orders, who spoke on the condition of anonymity because of political sensitivities, most of the jets included in the announcement -- 40 larger twin-aisle aircraft and 260 single-aisle airplanes--are not newly ordered.

As is typical with state visits of foreign leaders to China, the announcement includes jet deals that were either ordered long ago or are not yet firm orders.

Boeing declined to comment, but the absence of any details in its news release suggests that it's more spin than news.

In this case, the puffery is not so much from Trump. It's just the usual way of doing business in China -- the same game whether it's Trump or Barack Obama or the president of France visiting and whether the jetmaker is Boeing or Airbus.

Underlying the stage-managed news is the reality for Boeing that China, the world's largest commercial aircraft market, will take hundreds of its jets in the years ahead. But the order details emerge from China's closed business system only slowly.

A similarly fake announcement, for 200 Boeing airplanes, was trumpeted in 2011 when Xi's predecessor, President Hu Jintao, came to the U.S.

It turned out that none of those 200 planes were new orders; it was just a repackaging of orders placed over the previous four years.

In 2015, on Xi's first state visit to the U.S., when he visited Seattle on his way to the White House, the order announcement was for 300 jets. Again, many of those 300 were orders Boeing had booked previously.

During a visit by Xi to Berlin in July, Airbus touted a $22 billion order for 140 planes from China, including 40 twin-aisle A350s and 100 single-aisle A320jets.

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