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Friday, January 21, 2011

New deal will see China purchase 200 Boeing aircraft

by Harry Oldfield
The US and China have just executed a new purchasing agreement worth $45 billion that will see China purchase 200 new Boeing aircraft. The purchase of these aircraft will be worth $19 billion and is only part of the total deal that has just been signed.

This new deal has come amid the Chinese President’s official state visit to the United States this week. The chief executive of Boeing, Jim McNerney was one of many chief executives from the US to be present at a meeting held yesterday at the White House with President Hu Jintao and President Barak Obama.

Other representatives to attend the meeting included Lloyd Blankfein from Goldman Sachs, Steve Ballmer from Microsoft and General Electric’s Jeff Immelt. Official reports say that this trade deal includes orders by China from US computer, telecoms and agriculture, and would also result in the creation of 235,000 new employment opportunities.

Other beneficiaries from this new agreement include the US technology company Honeywell, the construction equipment maker Caterpillar, and a nuclear power company Westinghouse Electric. Westinghouse Electric is a subsidiary of the Japanese company Toshiba.

This new order from China is great news for Boeing, which has just had to postpone the launch of its new Dreamliner for yet another six months. This might also help to give Boeing the edge over their rival from Europe, Airbus. Airbus has recently announced that they received a rush in December for orders. These orders saw Airbus outdo Boeing last year with a share of 52 percent of the market.

GE says China deals to bring $2 billion in sales

Five deals that General Electric Co signed with Chinese partners this week will generate more than USD 2 billion of revenue over the next decade for the US conglomerate, including about USD 1 billion of exports from the United States, GE said on Wednesday.

GE did not provide a time frame for the revenue and a spokeswoman was not immediately available to comment.

The flurry of dealmaking comes during a four-date state visit to the United States by Chinese President Hu Jintao.

Agreements included China's final approval of a USD 19 billion contract to buy 200 Boeing aircraft, and agreements with Honeywell, Caterpillar and Westinghouse Electric, a unit of Japan's Toshiba.

GE's agreements include a joint venture to develop coal gasification technology in China; a joint venture to develop aerospace components to support China's first large passenger jet, and a letter of intent to supply US-built locomotives, parts and service systems for an upgrade of Chinese railways.

Revenue from the deals would add to GE's top line over the coming five to 10 years, GE spokeswoman Leigh Farris said.

GE has said it will invest more than USD 2 billion in China through 2012 to expand research and development and develop new partnerships. Vice Chairman John Rice relocated to Hong Kong at the start of the year to lead GE's international businesses with particular emphasis on China.

Separately, GE said it was among 10 US companies taking part in a new public-private partnership to increase access to healthcare in China and boost cooperation on health technology.

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