Boeing Loses No.1 Spot to Airbus in China Market Since 2019
Biden Administration Declines Comment, Continues Tough Stance on China
[Asia Economy Reporter Hyunwoo Lee] David Calhoun, CEO of Boeing, the largest aircraft manufacturer in the United States, argued that trade issues should be separated from the U.S. government's tough stance on China and that free trade must be guaranteed. He claimed that in the aircraft sector, where the Chinese market share is growing, it is impossible to compete with other global companies without doing business with China. Under the U.S. government's hardline policy toward China, which has continued since the previous Donald Trump administration, Boeing's market share in China is said to have largely shifted to Airbus.
According to foreign media such as CNBC, on the 31st of last month (local time), CEO Calhoun stated at a virtual meeting on aviation industry normalization hosted by the U.S. Chamber of Commerce, "The U.S. government should separate disputes related to human rights, intellectual property, and other issues with China from trade issues," adding, "While the Chinese market is closed off, other competitors are encroaching on the market." He continued, "We cannot afford to be blocked by regulations. We still have to do business with China, the world's largest market, and we want the U.S. government to guarantee free trade."
Bloomberg reported that CEO Calhoun's remarks reflect the aviation industry's increased dependence on China following the COVID-19 pandemic. China is known to account for more than 25% of the passenger aircraft market and is growing at over 6% annually. Boeing is concerned that if its business dealings with China continue to be restricted, its management difficulties will worsen.
Previously, Boeing lost more than 50% of its market share in China to Airbus starting in 2019 due to the intensifying U.S.-China trade dispute during the Trump administration. Furthermore, competition has become fiercer since early last month when the Commercial Aircraft Corporation of China (COMAC) officially entered the domestic aircraft sales market in China.
However, it is uncertain whether this will influence the Biden administration's tough stance on China. According to major foreign media, the White House and the U.S. Trade Representative (USTR) declined to comment on CEO Calhoun's remarks. Within the U.S., industries with high export dependence on China and groups such as the Tariff Reform Coalition have demanded the removal of tariffs on China, but the Biden administration has continued to refuse.
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