Boeing opens first 737 plant in China amid trade tensions

Boeing opened its first 737 completion plant in China as the Chicago-based airplane maker navigates the ongoing trade war between Washington and Beijing. 

The company also delivered the first 737s completed at its new Zhoushan facility to state carrier Air China during a ceremony Saturday, according to Reuters

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The plant’s opening, intended to grow Boeing's sales lead over rival Airbus, comes as the two companies fight to outdo each other in China’s rapidly expanding aviation market, Reuters reported. China will likely surpass the U.S.'s aviation market in the next decade, according to the outlet. 

Boeing invested $33 million in 2017 to take a majority stake in a joint venture with state-owned Commercial Aircraft Corp of China in order to build the plant, which installs interiors and paints liveries.

The company sent over a quarter of its total airliners to China last year, where Boeing estimates demand for new airplanes in the next 20 years will reach $1.2 trillion worth of planes.

The opening of the new plant comes amid an ongoing trade war between the U.S. and China. The two countries are currently honoring a 90-day ceasefire from applying more tit-for-tat tariffs as the nations try to negotiate a deal.

“Am I nervous about the situation? Yeah, of course. It’s a challenging environment,” John Bruns, president of Boeing China, told reporters on a conference call Saturday. 

“We have to keep our eye on the long game in China. Long term, I’m optimistic we will work our way through this.” 

While soy bean farmers and other businesses in the U.S. have been hit by the tariffs, U.S.-made aircraft companies have so far avoided being hit. Bruns called aviation a “bright spot” amid the conflict between Washington and Beijing.

Boeing said it hopes to hit a goal of 100 planes delivered per year from its Zhoushan plant, though Bruns declined to lay out a timeline on reaching that mark.

He added that the company has no plans to expand to other types of aircraft at the facility.

The opening also comes as Boeing seeks to relieve pressure on its Seattle plant, which has struggled with production delays but seeks to boost output in 2019, according to Reuters.