President Donald Trump said Thursday that China will buy 200 aircraft from Boeing, less than half of the 500-plane order that was speculated in advance of the president’s state visit to Beijing. “One thing he [Chinese President Xi Jinping] agreed to today, he’s going to order 200 jets. That’s a big thing. Boeings,” Trump told Fox News. “Boeing wanted 150, got 200.” The order, which will likely be mostly 737 MAX aircraft, is Boeing’s first from China in about a decade. Although Chinese airlines have added some Chinese-built C919 airliners in recent years, most of the new aircraft purchased in the last 10 years have come from Boeing rival Airbus.
Boeing stock actually fell 4.7% on news of the multibillion-dollar order, which had been widely anticipated to total as many as 500 aircraft. Market anticipation was fueled by news that Boeing CEO Kelly Ortberg was on Air Force One to take the order in person. “An order for 200 aircraft is disappointing for a market that expected more than 300, especially detailed breakdowns by model,” Bloomberg analyst George Ferguson said, “In the past, there have been quite a few cases where aircraft purchase agreements by the Chinese government did not lead to final contracts.” China will need about 1,000 new airliners in the next 20 year, and this order raises questions about how big a slice the once-dominant Boeing will get.
Smiley/happy talk amid insults aimed at the press on Air Force One do not fool traders in the marketplace. Touting fewer than 300 Boeing orders as an historic achievement and reclassifying historical ally Taiwan as now a mere bargaining chip might fool people who don’t pay attention, but none of that fools folks who do pay attention.
The whole China visit was a show, nothing changed for the better between the two leaders.
I’m sure that Xi would disagree. China unquestionably came out ahead.