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US aircraft builders court unhurried China

By Mark StevensStaff correspondent of The Christian Science Monitor / March 18, 1980



Los Angeles

United States aircraftmakers are frequently happy with single-digit orders for their airliners. But in the case of the People's Republic of China, they scent the possibility of double-digit sales.

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The Civil Aviation Agency of China (CAAC) has stated that it needs at least 350 new jets in the future -- perhaps over the next 20 years -- to develop air travel and to replace many airplanes, including Russian-built jets, that are fast becoming obsolete.

American manufacturers, quite obviously, are eager to lock up any portion of the market. But dealing with the Chinese involves a new set of rules, including one major stipulation: There is no hurry.

"They are very forthright, very honest, and very tough negotiators," says one industry spokesman.

Nonetheless, sales are possible. Following a 1972 order for ten 707s, the Boeing Company landed a $160 million order for three 747 SP (special performance) jets in late 1978. Delivery is expected to begin this month.

And while McDonnell-Douglas Corporation has not secured any contracts, sources say that a deal is within reach. The company itself is saying little.

"We've been there [to China]. We are talking. Negotiations are going on. That's progress," says Douglas Aircraft Company spokesman David Eastman. He declined to say whether a sale was "close." The talks, he added, "are too delicate."

For 10 days last June, The company demonstrated a DC-9 Series 40 jet to the CAAC. Several thousand people traveled between Peking, Canton, and Shanghai as part of the sales pitch. The company would particularly like to sell the new DC-9 Super 80, which is quieter and more fuel efficient. But to date no orders have been placed.

Salesman at Douglas have also found the Chinese to be cautious: "They are cordial, but somewhat different. There are no fast-paced negotiations."

Observers suggest that while other foreign buyers know the capabilities of American jets and are familiar with American contract specifications, the chinese are not. In addition, they have their own ideas about how the jets will meet their needs.

"It is not so much a marketing job, but a job of satisfying their requirements once they have decided to buy," says one source.

Despite the careful consideration of each order by the Chinese, nobody denies that Boeing holds a slight edge entering the competition. When US presidents and high-ranking diplomats fly to Peking they are frequently met emerging from Air Force 1, a Boeing 707. That particular jet may serve as both handsome advertising and a credible endorsement for the product.

Ever since the 707 sale in 1972, boeing has maintained a service office in Shanghai and regularly sent salesmen to China.

Industry sources believe that the Chinese will eventually seek a broad mix of jet types, including sizable numbers of short-to-medium-range DC-9s. They will also place orders with manufacturers in Britain and France.

Sales of jets to smaller Asian countries hint at the possibilities American firms see in China. Singapore alone has ordered 19 Boeing 747s and ten 727s, a huge order.

"With the population base in China and their growing interest in trading around the world," says one industry spokesman, "it certainly could be mammoth market."