Boeing-China Pact Is ‘Critical Step’ Deal Hailed As Watershed For U.S.-China Trade Relations

U.S. and Chinese leaders hailed China’s $3 billion purchase of 50 jetliners from the Boeing Co. on Thursday as a potential turning point in U.S.-China trade relations.

“This is the largest trade event in the history of China aviation,” said Chen Guangyi, minister of general administration for the Civil Aviation of China.

“It’s a critical step in addressing our trade imbalance,” said U.S. Commerce Secretary William Daley.

Guangyi signed the three-year deal with Boeing officers as Daley watched and scores of employees from Boeing subcontractors in 42 states cheered in a Commerce Department ballroom decorated with miniature U.S. and Chinese flags and red, white and blue balloons.

The deal, involving the sale of one 747, five 757s, eight 777s and 36 737s, could be a “turning point in U.S.-China trade,” Daley said.

“It’s a strong signal that China wants to build a stronger commercial relationship with the U.S., one based on cooperation and mutual benefits,” he said.

Guangyi said it was significant that Clinton and President Jiang Zemin announced the deal first on Wednesday during a news conference at the White House compound. He said it brings the countries’ relationship to “a new stage of development.”

Phil Condit, Boeing’s chairman and chief executive officer, said the deal was the culmination of a 25-year relationship dating to the sale of 10 Boeing 707s to China after President Nixon visited there in 1972.

Raymond Waldmann, Boeing’s vice-president of international business who was in Spokane this week, said that until Thursday, Boeing didn’t know the exact size of the order.

He said Boeing is not overly concerned about the economic troubles that have lately plagued Asian countries.

“Obviously the currency fluctuations in the stock market are unsettling,” he said. “But the airlines are in this for the long haul.”

Waldmann said the forecasts for orders are good. “We’re in a boom right now.”

Boeing, which recently merged with McDonnell Douglas, has been one of the biggest U.S. corporate cheerleaders for normalized trade relations with China. As of last month, 279 of the 354 jetliners operating in China came from Boeing.

“This is a great moment, the largest ever order from China for commercial airplanes,” Condit said at the ceremony. “The key to Boeing’s success, in what I believe will be the global century, is open trade.”

Condit said several officials in the Clinton administration deserved credit for helping to seal the deal, “not the least of whom was the president himself.”

“The best way to change the world is engagement. Working with people has far more influence than pushing them,” he said in regard to complaints about China’s record on human rights.

Among the subcontractors standing beneath state signs were John Thomas of Unitech Composites in Hayden, Idaho, and Garry Vandekieft, president of Cashmere Manufacturing in Wenatchee.

Thomas, the only person beneath “Idaho,” said his firm, Unitech Composites, is “geared up to take on more capacity.” But he couldn’t say how many more jobs would be created as a result of the deal. Last year, Unitech revenues reached $10 million, matching the past few years.

Under the Washington state sign, a bit closer to the stage, Garry Vandekieft, president of Wenatchee-based Cashmere Manufacturing, said the China deal will “have a tremendous impact on us.” The company, which makes precision airplane parts, sells more than 65 percent of its inventory to Boeing, another 30 percent to Boeing subcontractors.

Cashmere employs 150 people, a figure that has doubled in the last year, and had revenues last year of $10.9 million. This year, he said, revenues are expected to be more than $16 million.

Washington Gov. Gary Locke, in town for the summit with Jiang as the the nation’s only Chinese-American governor, echoed those sentiments in a speech later Thursday to the Asian Pacific American Community of the Greater Washington, D.C., Area.

“Open markets lead to open minds,” Locke told the luncheon crowd of 300 at the Capital Hilton.

“Although there’s no doubt that China’s progress on human rights is uneven and imperfect, the genie of freedom and the hunger and the thirst for democracy, civil liberties and religious freedom is out of the bottle and will never be stuffed back in,” the Democratic governor said.

, DataTimes The following fields overflowed: CREDIT = From staff and wire reports Staff writers Lori Sudermann and Laurie Snyder also contributed to this report.