Boeing opens production facility in China
ZHOUSHAN, China – Boeing Co. opened a new Chinese production facility, as the American aviation company tries to cater to its top export market while steering clear of the tensions battering US-China relations.
At what Boeing calls its "completion and deliver center" here on an island south of Shanghai, the first finished jet, a 737 MAX, rolled off the production line on Saturday, ready for delivery to Air China Ltd.
Though a Boeing billboard for the facility at the local airport proclaims "the future is built here," the center doesn't actually build planes. Rather, it paints and fits the interiors of jets flown in from Boeing's factory in Renton, Wash., ahead of their delivery to Chinese airlines.
The facility, and its limited remit, illustrate the tightrope Boeing is walking as the US and China spar over trade, including the transfer of technology.
"Boeing's walking a fine line," said Scott Kennedy, an expert on China's industrial policies at the Center for Strategic and International Studies, a Washington, D.C., think tank.
Boeing, he said, must court China to safeguard its market position without risking a backlash at home, where manufacturers are under pressure to build more in America and less in China.
Boeing China's president, John Bruns, called the new center in Zhoushan "a big deal." It will produce 100 jets a year and employ 300 people at full capacity.
"It really demonstrates our commitment to this market," Mr. Bruns told reporters Saturday ahead of the center's opening ceremony. That is especially so, given the "challenging time we're going through," he said, referring to US-China relations.
After threatening and then imposing tariffs on goods that cover about 60% of their trade, the US and China declared a 90-day truce this month to create room for negotiations. Even if the two sides manage to put punitive tariffs in abeyance, harder to resolve will be many of the Chinese trade practices the US says are unfair, including the coercive transfer of technology.
China's leadership has set its sights on retooling the country's manufacturing base to dominate industries of the future, including aviation. While officials are considering shelving the centerpiece strategy for that effort, known as Made in China 2025, as a concession, many powerful bureaucracies and state companies believe that such an upgrade is critical if China is to become a superpower. (WSJ)