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Boeing Courts Chinese Business Friction Between Washington, Beijing Blamed For Lost Sales

Wed., June 26, 1996

Political tensions between Beijing and Washington have cost The Boeing Co. business in China, the U.S. airplane maker’s president said Tuesday.

As the countries differed over trade, Taiwan and nuclear proliferation this spring, China ordered $1.5 billion in planes from Europe’s Airbus Industrie, delayed buying $4 billion worth of Boeing and other planes, and chose France’s Aerospatiale as a prospective partner to build a 100-seat aircraft.

“I don’t think you can ever separate entirely politics from business. Those factors were part of that decision,” said Phil Condit, president and chief executive officer of the Seattle-based company.

Condit and the rest of Boeing’s board of directors are in China for meetings and travel intended to shore up its share of the Chinese market.

Boeing has invested $100 million in China in the past two years. Its planes account for 70 percent of the Western-built aircraft Chinese commercial carriers are flying, and the company is looking to China’s market for future growth in sales.

Beijing also appreciates Boeing’s efforts in China and has used the company’s reliance on Chinese purchases to pressure Washington during trade disputes.

Chinese Premier Li Peng told Condit and Boeing Chairman Frank Shrontz on Monday that some Clinton administration policies and moves by Congress were spoiling relations.

Condit called the meeting cordial and told reporters he shares Li’s views on how to improve ties.

Boeing wants Washington to support Beijing’s entry to the World Trade Organization and to grant China normal trading rights permanently instead of subjecting its most-favored-nation trade status to divisive yearly reviews.

President Clinton has extended MFN for another year, and Congress is expected to approve it after a debate. Washington and its European allies have put China’s World Trade Organization bid on hold until Beijing liberalizes rules on trade and market access.

Condit also said Boeing remains interested in finding a partner to build 100-seat jets but is not engaged in negotiations with any prospective partners.

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