China Begins Reviewing Boeing Aircraft Purchases
Reemerges as a Key Strategic Card
As progress is being made in the US-China trade negotiations, Chinese aviation authorities are reportedly considering expanding their purchases of Boeing aircraft. With a thaw in relations between the two countries, some analysts suggest that China may be using these purchases as part of its "gift diplomacy." Recently, Boeing has been used as a strategic bargaining chip by the United States in trade negotiations with Japan and the European Union (EU).
The South China Morning Post (SCMP) in Hong Kong reported exclusively on the 29th, citing sources, that the Civil Aviation Administration of China (CAAC) has requested domestic airlines to update their aircraft purchase and replacement plans for the period after 2025. According to sources, the airlines have been asked to specifically report whether their plans include overdue orders for Boeing aircraft and what discussions they have had with Boeing. On the 28th, the CAAC officially announced that Director Song Zhiyong met with Brendan Nelson, Boeing's Senior Vice President of Global, in Beijing to exchange in-depth views on expanding cooperation, reaffirming China's conciliatory gesture toward Boeing.
Until recently, Boeing's position had been significantly shaken due to a series of aviation accidents, escalating geopolitical tensions, and the COVID-19 pandemic. In particular, when the US-China tariff war intensified in April, and both countries imposed triple-digit tariffs on each other's imports, China suspended deliveries of Boeing aircraft as a retaliatory measure. As a result, three 726 MAX aircraft were returned to Seattle, United States, from the delivery center in China immediately after arrival.
The backdrop to Boeing's recovery is the recent progress in high-level US-China trade negotiations. The two countries are currently holding their third round of trade talks in Stockholm, Sweden, and are discussing a plan to extend the tariff truce, which is scheduled to end on August 12, by an additional 90 days.
There is also speculation that, ahead of President Trump's visit to China, China may decide to purchase Boeing aircraft as an "advance gift." The Washington Post (WP) reported last week that President Trump and President Xi Jinping may meet in person either before or during the Asia-Pacific Economic Cooperation (APEC) summit, which will be held in Korea in October. According to the report, President Xi proposed a visit to China to President Trump during their phone call in June.
In the past, China has used large aircraft purchase contracts to alleviate trade imbalances with the United States or the EU, or to address Western concerns over trade deficits. Such contracts are often announced or signed to coincide with visits by US or European leaders to China. The last time China signed a multi-billion dollar purchase contract with Boeing was in 2017, during President Trump's first visit to China.
Boeing is also a representative card frequently used by the United States in trade negotiations. The Trump administration secured additional Boeing purchase commitments during negotiations with Japan and the EU, and both Japan and the EU have each formalized the purchase of 100 Boeing aircraft.
Bryan Yangbo, founder of a Chinese aviation consulting firm, analyzed, "If the tariff negotiations are concluded, Boeing aircraft could once again emerge as a key bargaining chip. Since there is a possibility that President Trump will visit China by the end of the year, China needs to prepare a gift accordingly."
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