China to buy 150 Airbus aircraft

Updated: 2006-10-26 10:50

French president kicks off visit

China signed an order Thursday for 150 mid-size Airbus A320 planes, one of a number agreements signed at the start of French President Jacques Chirac's state visit to China.
According to Airbus CEO Louis Gallois, the ordered planes would be assembled in China and delivered between 2009 and 2012. China also signed a letter of intent to purchase 20 of Airbus's larger A350 aircraft.

Visiting French President Jacques Chirac (R) and Chinese President Hu Jintao review the honour guard during a welcome ceremony at the Great Hall of the People in Beijing October 26, 2006. Chirac led an elite business contingent to China, hoping to seize a greater share of the world's fourth largest economy on a state visit. [Reuters] More Photos on Chirac Visit

No monetary value was given for the order, nor were details released about which Chinese airlines would receive the planes.

But the deal represents a boost for Airbus in the fast-growing China market at a time when the company is struggling over management changes, cost-cuttings and delays to its A380 super-jumbo jet project.

Trade talks

French President Jacques Chirac and a delegation of French executives traveled to China on Wednesday in hopes of expanding trade with one of the world's largest economies.

Chirac is seeking to expand economic ties in areas such as nuclear power and rail transport where France is a major player. The talks with Chinese leaders were also expected to touch on the North Korean and Iranian nuclear disputes. [Busy Schedule]

Among European Union members, France has been an outspoken advocate of engagement with China and has garnered significant good will with China for its support of efforts to have a 17-year-old EU ban on arms sales to Beijing lifted. France has also called on the EU to recognize China as a market economy.

"We favor the European Union's recognition of the market economy (in China)," Chirac said in an interview with China's Central Television news before leaving Paris. He added that France also was in favor of scrapping the "anachronism of the embargo." 

Beijing has asked repeatedly for the ban to be lifted, calling it a Cold War relic. France is in favor, but others in the 25-nation EU have failed to reach agreement.

French trade ties to China -- the world's fourth-largest economy -- have nearly doubled since 2000 but are still relatively slim. France currently holds only a 1.4 percent share in the expanding Chinese market while Germany has a 4 percent share, according to French government figures.

Soon after the 30-member business delegation's arrival, the CEO of France's Alstom SA announced a deal to supply 500 freight locomotives to China, in a venture with Chinese counterpart Dantong. Patrick Kron confirmed the deal in Beijing, saying it would be worth more than US$1.28 billion.

On Thursday morning, Chirac was scheduled to meet with his Chinese counterpart, Hu Jintao. Both France and China are among five permanent UN Security Council members with power to veto UN actions.

The four-day visit to China is Chirac's second in two years and likely the last of his mandate, which ends in 2007. He is unlikely to seek a third term.

Meanwhile, the European Union issued a report Wednesday calling on China to open its markets wider to foreign competition.

The EU, which has overtaken the United States as China's biggest export market, ran a US$133 billion trade deficit with China last year and the two have sparred over low-cost Chinese textiles and shoes.

"With growing economic muscle ... come growing expectations," the EU ambassador to Beijing, Serge Abou, said at a news conference.

In an interview with the Xinhua News Agency, Chirac said booming Chinese growth "naturally raises questions" about its respect for free-market rules, its political evolution and ambitions and its environmental impact. A copy of the interview was released by Chirac's office.

Chirac told CCTV that France was particularly concerned about China's trade in counterfeit goods.

"It represents a real difficulty politically and economically," he said. "I know that the Chinese authorities are sensitive to this and are trying to fight against the development of this counterfeiting. I hope they will succeed."