Airbus Bags Big Orders in China

Airbus has inked a deal with cash rich China for the biggest single order for 170 aircrafts worth approx $14 billion. The company has also signed an agreement with Chinese authorities to build its first aircraft assembly plant at Tianjin in eastern China.

The plant, where the company intends to assemble its A320 family of single-aisle, short-haul jets is expected to be located in the huge Binhai development zone. As a strategy the jets would continue to be produced in Europe but would be shipped to Tianjin for final assembly.

Airbus executive vice-president strategy, Olivier Andries, said, "The main rationale in starting assembly is to build our presence in the Chinese market."

Regarding the deal of supply of 170 aircrafts which Airbus and China Aviation Supplies Import and Export Group Corp signed, 150 are Airbus A320 aircrafts and 20 are the highly advanced A350 airplanes.

The deals were struck at the formal start of a state visit by President Jacques Chirac to China. The latter (China) had also bought 150 Boeing jets during a visit by President Bush in November 2005, and another 150 from Airbus during Chinese Premier Wen Jiabao's visit to France.

Airbus now hopes to stay ahead of its rival Boeing in the fast-growing Chinese market by investing in local assembly, even as it faces restructuring at home due to A380 superjumbo delays. Airbus chief executive Louis Gallois said, "With a big country like China, if you want to be present (commercially), you also need to be present industrially."

China and France signed a joint statement and 14 cooperation agreements in all ranging from aviation, nuclear power utilisation to prevention of infectious diseases. French president Jacques Chirac appealed to the European Union to lift its arms embargo against China. He also advised the EU to grant 'market economy status to China', which most western nations have refused to give despite Beijing's growing economic influence in the world.