Nicholas Ionides and Leithen Francis / Singapore

Purchase announcement for up to 30 737s expected to coincide with December visit to USA by country's premier

China is preparing to place a major aircraft order with Boeing in a politically timed move aimed at reducing its trade deficit with the USA and easing tensions over currency values.

The country's senior leaders have been indicating to their US counterparts in recent weeks that a billion-dollar deal for Boeing aircraft is imminent, and industry sources in China say orders for up to 30 737-700/800/900s are expected to be announced soon.

The order announcement is likely to be made during or shortly before a planned early December visit to the USA by Chinese premier Wen Jiabao, add the sources.

China typically times large orders for foreign goods around high-level political visits. Several Chinese carriers are known to have been seeking government approval to add new narrowbody aircraft to their fleets, among them Air China, Shandong Airlines and Shenzhen Airlines. Reports also say that Xiamen Airlines is expected to be allocated aircraft from the order.

Air China has received government approval to take five 737-700s from 2005, while Shandong has said it wants to order 737-700/800s. Shenzhen Airlines earlier this year signed a memorandum of understanding to order 737-900s (Flight International, 11-17 March) and if firmed up it will represent Boeing's first sale in China of the highest-capacity 737 variant.

In recent months the USA has stepped up complaints against China's policy of pegging its currency to the US dollar at what many lawmakers have claimed is an artificially weak level to boost exports, in turn hurting US goods manufacturers.

There have been growing calls from the USA for Chinese authorities to revalue its yuan, in part to reduce a trade deficit that exceeded $100 billion last year, although Chinese officials have repeatedly rejected such calls.

China's last confirmed order for Boeing aircraft was announced in September, covering five 757-200s for Shanghai Airlines, while in April China agreed to order 30 narrowbody and widebody aircraft from Airbus on behalf of five carriers. The last bulk order for Boeing aircraft was placed in October 2001, when the Chinese government ordered 25 737-800s and five 737-700s on behalf of five airlines.

Source: Flight International