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Boeing Builds Aircraft in China, Who Orders Fleets of Planes and Spacecraft

Updated on August 18, 2018
Patty Inglish, MS profile image

Ms. Inglish has 30 years of successful experience in medicine, psychology, STEM courses, and aerospace education (CAP).

Economical Narrow-Body 737 Airliners

New Boeing 737-900 in 2011. America, the home of Mickey Mouse, sends a large order of new narrow-body 737s to China. Advertising brings in additional revenue.
New Boeing 737-900 in 2011. America, the home of Mickey Mouse, sends a large order of new narrow-body 737s to China. Advertising brings in additional revenue. | Source

Massive Chinese Commercial Aircraft Market

Boeing Co. predicts that the Chinese passenger plane market for 737s will reach $1Trillion in new orders for aircraft from 2015 - 2035. This coincides with other private sector aerospace companies' plans to mine asteroids and land on Mars well before the end of that two-decade period. Boeing hopes to be the leader in design and manufacturing of new airliners.

Commercial Crew Build Planes For China

Boeing Co. has been a major member of the NASA Commercial Crew by providing the design and manufacture of the Boeing CST-100 Starliner spacecraft, the next step up from the 787 Dreamliner passenger plane.

Boeing and the Commercial Crew became more visible and active after the final US Space Shuttle Launch in July 2011. Boeing and its brothers and sisters in the Crew were the saving actors to preserve the American Space Program and aerospace business in both public and private sectors. Americans who knew about this were elated! Others believed the US penetration into outer space was over.

Four years later, Boeing was building aircraft for the Chinese, to whom the USA owed billions of trillions of dollars in debt resulting from financial need during the Great Recession (2008 - 2010) and its lingering after math.

America's military forces had already partnered with the Japanese Space Agency (JAXA) to clean up near-Earth space of debris, but also likely to patrol the skies in general. In late 2015, the US contracted to provide aircraft - likely to include spacecraft or spacecraft parts - to the Chinese communist government. The two projects seem at cross purposes, although a large influx of revenue to Boeing is welcomed.

Boeing is not building planes for China specifically in its role as a member of the NASA Commercial Crew, but it is difficult to separate the two roles. Where some individuals feel that Boeing is helping a potential American enemy, company leaders see good business prospects.

USA Helps China In Aircraft Construction 2001 - Present

The USA has aided China in aircraft construction since a 2001 large project that used parts from GE, Eaton, CFM, Honeywell, BF Goodrich, Boeing, Moog, Rockwell and other American companies.

China Gains American Technologies

The huge aircraft order for China was announced during the tour of Commercial Crew member Boeing Co. headquarters by the Chinese president Xi Jingpin. The public knew nothing concrete about this partnership beforehand, although some may have suspected it. Secrecy surrounds the buyers of a number of planes that company officials report as "previously ordered."

The order is initially for 200 to 250 Boeing 737 planes and 50 planes with wider bodies.

Boeing leaders reported that the company plans to build an aircraft center in China specifically for completing the assembly of 737s. The aircraft manufacturing process begins at Renton, Washington and ends in China. Some Boeing manufacturing workers that belong to unions feared that they would lose their jobs to relation overseas during this time in which America seemed to be wanting to bring back such outsourced jobs.

Once a finishing center is completed in China, it is possible that the Chinese government may also use it for the design and manufacture of experimental aircraft and other production. How and if Boeing will be involved in these speculated projects is unknown. However, it is widely known that the USAF base at Wright Patterson in Dayton, Ohio has long been responsible for reverse engineering foreign technologies. To some minds, the US is more directly handing the Chinese some important technology. The results of such an action are not clear.

Cornering the Narrow-Body 737 Market

The French company Airbus Group has thus far cornered the Chinese market on narrow-body aircraft in the 1990s and 2000s. Next, company leaders placed an Airbus assembly plant in China to more quickly and efficiently serve the Chinese market at a rate of $97Million per plane.Boeing was late to the game on this move.

Boeing Co. in 2015 worked on a new, more efficient narrow-body design - the 737 MAX, but had only begun planning an assembly hub in China.

By late 2015, Boeing had already a history of building its 737s for 22 countries outside the USA, including Iran, whom many view as an enemy of America. However, these all have been 737 passenger airliners, rather than war planes.

Boeing may be able to take over the the global market narrow-body with its 737 MAX, if they can capture some of that market away from Airbus and its successful presence in China.

However, Airbus opened a brand new airliner factory in the United States in mid-September 2015, in Mobile, Alabama -- Who is taking over whom? A bright spot for US business is that the Boeing Chinese order for $38Billion surpasses the last most lucrative narrow-body order, that of $26Billion for Airbus in India in 2015.

Alabama, the home of space-faring Huntsville, has been courting Chinese business for some time and with Airbus in Mobile, the state may capture both French and Chinese business.

The French Airbus Group assembles narrow-body airliners in Tanjin, China at the cost of $97 million per plane.

Click thumbnail to view full-size
Narrow Body Airliners: This one was tested in 1986.Photographed in 2007.Take off photographed in 2010.Airbus320E (Enhanced) photographed in 2012.
Narrow Body Airliners: This one was tested in 1986.
Narrow Body Airliners: This one was tested in 1986. | Source
Photographed in 2007.
Photographed in 2007. | Source
Take off photographed in 2010.
Take off photographed in 2010. | Source
Airbus320E (Enhanced) photographed in 2012.
Airbus320E (Enhanced) photographed in 2012. | Source

The Future - Boeing Dreamliners

United Airlines has planned an interior route into the interior of China for its Boeing 787 Dreamliners and is seeking approval of that route.

The Chinese President admired the Dreamliner during his tour of Boeing headquarters in 2015, so he may consider purchasing a group of these upscale passenger planes in the near future. They can fly up to nearly 600 mph.

If Boeing can sell the 787 to the commercial airlines-hungry Chinese, then the company may become the leader of commercial aircraft sales there.

Test flight an a 787 Dreamliner after final assembly for United Airlines.
Test flight an a 787 Dreamliner after final assembly for United Airlines. | Source
How many steps will we see between the Dreamliner and the Starliner before we and/or China land on Mars? This adventure can be profitable.
How many steps will we see between the Dreamliner and the Starliner before we and/or China land on Mars? This adventure can be profitable. | Source

© 2015 Patty Inglish MS

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    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      17 months ago from USA. Member of Asgardia, the first space nation, since October 2016

      Amazing how China is involved in so many American businesses. When they bought Smithfield Food (ham, etc.), the size of Polish/smoke sausage packages reduced from 14oz to only 9oz for the same price!

    • Shyron E Shenko profile image

      Shyron E Shenko 

      17 months ago from Texas

      When I read this I thought of the song 'where have all the flowers gone' or more like where has our technology gone?

      Gone to China everything.

      hank you Patty, this was/is very interesting, I hope it get saved in museums everywhere so everyone will be aware of where it cam from.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      @FlourishAnyway - As you say and very tricky, I think - there may be other tax angles,fees, surcharges, and perhaps even discounts or kickbacks (I hope not) happening in this deal. If cheaper Chinese labor is used most often in the Boeing Chinese plant, that use may lead to more frequent plane malfunctions, for which Boeing may be blamed. The site duncanaviation DOT com explains importing plane parts more fully, at least from any other country into the USA, and mentions fines as well as fees.The reverse, USA to China may be worse.

      Another website aopa DOT org explains both import and export of complete planes. Then there is dutycalculator DOT com for parts. And, some articles refer to reduction or cancellation of some taxes for import to China.

      And - how about this relationship of China and Boeing, which is a government contractor and also part of the NASA Commercial Crew? It sounds difficult. And, would the IRS or other federal agency attach Boeing revenues from China to offset the debt the US federal govt owes China?

      As you say - tricky!

    • FlourishAnyway profile image

      FlourishAnyway 

      3 years ago from USA

      What a tricky relationship. We should be very cautious about this.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      @lawrence01 - I did not know that about Japanese activities. How interesting and enlightening, so thanks for that!

    • lawrence01 profile image

      Lawrence Hebb 

      3 years ago from Hamilton, New Zealand

      Patty

      I meant to add its what the Japanese did in the 1980s in Europe, they built factories in England because they knew that Europe was going to put up trade barriers which they did in 1991 with the Maastricht treaty!

      To me, I think the days of big government spending to explore the Heavens are almost over and the future will be corporates looking for raw materials like the asteroid mining but we'll see

      Lawrence

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      I knew there must be a tax angle or some other monetary ploy to all this - Thanks for the information.

    • lawrence01 profile image

      Lawrence Hebb 

      3 years ago from Hamilton, New Zealand

      Patty

      Some interesting stuff here, and with the TPPA only days away from being signed that would cut China and India out of these kind of things (and make life a damned sight harder for anyone trying to sell to them as they will find it more difficult to sell their wares) it kind of makes sense that Boeing would do something like this to get around the TPPA rules (no import taxes on goods produced in country).

      Let's face it, our cars are made this way (Toyota and Nissan both build cars in both the USA and Europe to get round the EU rules and US system and give local jobs in the process!)

      I did also hear recently that Boeing are now using robots on their assembly lines for the airliners, that's more ofa worry for jobs!

      Great hub though

      Lawrence

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Hey, that would give more pilots some jobs, maybe - flying 1000s of planes to China. Thanks for the joke, funny either way.

    • mckbirdbks profile image

      mckbirdbks 

      3 years ago from Emerald Wells, Just off the crossroads,Texas

      My apologies Patty. My joke was that Boeing would just fly the finished plane to China. I am sure that all non critical parts would be made or are already made in China.

      The trouble with sending all the labor requirements in the world to China, is that there will be no one left to buy the products. It is a self defeating spiral downward for all of us.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Oh boy! You are good at infotainment.

      I think there is an extra fee for shipping a fully assembled plane. Will try to find out.

    • mckbirdbks profile image

      mckbirdbks 

      3 years ago from Emerald Wells, Just off the crossroads,Texas

      The beauty of delivering an airplane from Washington State to China, is that we can ship it next day air. (Ok bad joke) but that has to be less expensive that putting parts on a ship.

      Now back to our regular broadcast.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      I agree that making aircraft in China seems financially counterproductive. I suppose there are savings in shipping, taxes, import fees, etc. to assemble the American parts in China - I bet a whole airplane costs more to ship than do airplane parts. Plus, Boeing wants to capture business away from the French plant already in China - Big Business and prestige reasons, maybe.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Fluctuation may have to do with interest payments made, changes in exchange rates, additional borrowing, and other factors. It would be nice if we could cancel an equal amount of each other's debts, but that erases all that future interest income.

    • tillsontitan profile image

      Mary Craig 

      3 years ago from New York

      How interesting! We owe, we sell, we owe, all to the same country. How sad the U.S. owes so much money! Our biggest debts are to China and Japan. I found too that we owe China $1.272 trillion and Japan $1.2244 trillion. It seems the numbers fluctuate on a regular basis, but no matter the exact amount it's embarrassing!

      It would be great to make money on aircraft sold to China, but making that aircraft in China seems counter-productive.

      Interest hub Patty.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      @MsDora - You're welcome! The space program around the world and tis related aircraft businesses always catch my eye and I hear quite about about it all through my contacts - no big government secrets, though! All this will probably be very interesting in the next five years!

    • MsDora profile image

      Dora Weithers 

      3 years ago from The Caribbean

      I really appreciate the research you do and present. I learn so much. The Boeing-China connection is certainly one to observe.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      I was curious and found different reports of amounts USA owes to China:

      CNNMoney as of April 2015:

      We owe Japan $1.2244 Trillion and

      We owe China $1.2237 Trillion

      US Debt Clock (DaveManuel.com) as of June 2015:

      1. China, Mainland, $1271.2 billion or $1.2712 Trillion dollars

      2. Japan, $1197.1 billion or $1.1971 Trillion dollars

      If true, worse than I thought, but Japan may be our leading creditor. That's interesting.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Yes, that's a surreal setup - dog park operators in charge of national finance and Chinese working citizens flying for fares of a few cents. Won't happen, except perhaps for the dog park part.

      Generation Z's federal income tax as adults is likely to skyrocket in response to today's deficits. I agree that many politicians don't seem to attend to that, or don't care.

    • mckbirdbks profile image

      mckbirdbks 

      3 years ago from Emerald Wells, Just off the crossroads,Texas

      Hi Patty. The congressman who suggested a trillion dollar coin, is unfit to run a dog park. As for the Chinese flying more – it will not be the people working for one dollar a day. Americans will not work for Chinese pay, so any potential Americans traveling to China to work will upset the economic savings.

      And an aside the politicians that say deficits do not matter have no regard for the American people who will eventually be required to pay

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      3 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Hello Mike!

      I was thinking of that $1-Trillion coin a Congressman suggested we mint to pay off the Chinese. Even if we gain more income from the sale of planes than we owe the Chinese, the US government perhaps will not receive any of it in taxes. Or it might, if there is income tax on money earned abroad. I think there is such tax, but am not sure.

      The Chinese government says there is a trend toward more air travel by its citizens, so I suppose schools need to train more pilots - Or China might use military pilots, since it downsized its army reserves by quite a bit. That's presuming they have pilots in the reserve.

      I wonder if any Americans will travel to China to work in the assembly plant. Chinese labor is likely much cheaper -- An extreme example is the making of most of the Christmas tree twinkle lights sold in the US, by Chinese slaves - no pay, something like 14 hours a day of work.

    • mckbirdbks profile image

      mckbirdbks 

      3 years ago from Emerald Wells, Just off the crossroads,Texas

      Hello Patty. What a fact packed presentation. The process of globalization will go faster as all the major corporations more to a low labor zone. It make me wonder who is going to be flying in all those planes. Not us 'rich' Americans, that is for sure.

      I am pretty sure we do not owe billions of trillions to the Chinese. It just seems like it.

      Both State and Federal tax bases get clobbered when these big corporations move their facilities.

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