Boeing is close to its biggest deal with China since 2017. It is one of the most important markets

Aircraft manufacturer Boeing is close to a contract to supply up to 500 planes to China, Bloomberg reported Aug. 21, citing sources. Such a deal could end a years-long lull in sales to this crucial market, lasting since Donald Trump's last visit in 2017, the agency notes. China now favors Airbus, and the issue of Boeing deliveries is an element of bargaining in the trade war with the United States.

Boeing and the Chinese government are in the process of negotiating a complex deal to supply U.S. airplanes to the People's Republic of China, Bloomberg sources say. China is choosing the type of airplanes it needs, discussing delivery volumes and schedule.

According to one of the agency's interlocutors, China's State Development and Reform Committee recently requested information from national air carriers on the required delivery volumes. The discussion centered on the 737 Max series planes, Boeing's most popular narrow-body models. This indicates Beijing is preparing for a large-scale order, Bloomberg claims.

According to Bloomberg sources, the possible deal would be comparable in scale to the order for 500 Airbus planes, the agency's sources said on August 20, but it was not officially announced.

Boeing declined to comment on the possible deal to Bloomberg. In a January interview with the agency - before the U.S.-China trade war escalated - Boeing CEO Kelly Ortberg expressed cautious optimism about the success of the protracted negotiations with Beijing. "We're certainly hopeful that there will be an opportunity for new orders from China next year," he said at the time.

The company's shares on Thursday, August 21, rose by 1% after the publication of news about the negotiations with China, but then lost the gained and began to trade in the negative by about 0.4% - against the background of a decline in the entire index Dow Jones Industrial Average. Boeing shares have gained 27% since the beginning of the year: the company is recovering from a very bad 2024.

A major sale of Boeing, which the company has been working toward for several years, depends on whether the U.S. and China can ease long-standing trade disagreements, Bloomberg writes. The deal, which is being discussed now, could also fall through, the agency's sources said. The Boeing order is expected to be the centerpiece of a trade agreement favorable to both President Trump and Chinese President Xi Jinping, the agency added.

When the trade war with the U.S. escalated, China unofficially banned deliveries of finished Boeing airplanes, contracts for which had been signed earlier. And after the trade truce, the ban on Boeing deliveries to China was lifted, according to Bloomberg sources.

Boeing aircraft orders have become an important element of US diplomacy since Trump's return to the White House in January, the agency explains. For example, during Trump's visit to the Middle East in May, Boeing contracts were announced for the delivery of about 200 airplanes to Qatar, the UAE and Saudi Arabia. Since the beginning of the year, the US and China have held several rounds of talks after reducing reciprocal duties, which previously reached as high as 145%. However, a final trade agreement has not yet been reached. At the same time, the countries are discussing Trump's possible visit to China: this could be an occasion to announce a deal on Boeing deliveries to China, Bloomberg suggested.

For China, the deal will provide access to airplane supply slots that are hard to get from both Boeing and Airbus - both companies have effectively sold out of all their volumes for the coming years through the 2030s, Bloomberg explains. Boeing estimates that the world's second-largest aviation market will double its civilian airplane fleet to 9,755 over the next 20 years. This is far more than Chinese aircraft maker Comac is capable of producing.

Jefferies analyst Sheila Kahyaoglu noted in a note cited by Bloomberg that despite the slot shortage, Boeing likely has some flexibility in its delivery schedule for strategically important customers.

Boeing's latest deal with China was announced in November 2017 during Trump's first state visit. At that time, it was about orders and preliminary agreements for 300 narrow-body and wide-body airplanes worth $37 billion.

Boeing's deliveries to China peaked the following year, with a quarter of all airplanes produced going to mainland China. From 2019, the lead in deliveries to China passed to Airbus - after Chinese regulators became the first in the world to suspend the operation of the 737 Max after two fatal crashes. Chinese airlines did not return to using the 737 Max until 2023.

Boeing has received only 30 orders from China since the beginning of 2019, according to the company's website.

This article was AI-translated and verified by a human editor