Boeing Balances Investment & Access

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Last week I asked if protectionism would fly in China. Well, Boeing seems to agree (sort of) with Airbus that local investment is critical to long-term sales. MarketWatch reports that:

    “Boeing Co…doesn’t plan to follow rival Airbus in setting up an airplane assembly plant in China, but will seek new investment opportunities in the country, John W. Bruns, vice president of Boeing Commercial Airplanes’ China operations, said Wednesday.

    But Bruns said Boeing will focus on bringing quality products to China while seeking opportunities for new investments in the country. He said new joint ventures are among its options, but didn’t elaborate.

    China is one of Boeing’s most important production bases, he said. The company has purchased more than $1 billion worth of parts from Chinese suppliers since the 1970s and now has about $2.5 billion worth of active contracts with suppliers in China, he said.

    The U.S. giant already has a joint venture in Shanghai involved in aircraft maintenance, repair and overhaul, and another venture in Tianjin which makes composite parts for commercial airplanes, he said.”

With demand forecast at US$340 billion over the next 20 years, you can be sure that both players will want to ensure that they send out all the right messages (if not the full box of toys) to Beijing – which has aircraft plans of its own. As in other sectors, China will continue to try to attract high-technology and to localize content over time. Balancing short and long-term interests (and government relations) in this environment is a challenge.

See news source:

Boeing to invest more in China, but doesn’t plan assembly line
By MarketWatch
Last Update: 4:45 AM ET Sep 19, 2007
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BEIJING (MarketWatch)

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