China-U.S. economic talks may include new jet orders for Boeing

By Kristi Heim

Seattle Times business reporter

China may sign a new purchase order for Boeing planes during high-level economic talks this week with the United States.

The head of China's fourth-largest airline said Chinese carriers plan to acquire as many as 40 new planes, but the exact number to be purchased from the United States has not been determined.

The order is likely to include Boeing 737-800s and Boeing Business Jets, said Hainan Airlines Chairman Chen Feng during a visit to Seattle last week. It would not include additional 787s, he said, because Boeing has not given customers an exact delivery date for the ones already on order.

China typically announces airplane deals during official state visits or high-level government meetings.

Boeing spokeswoman Linda Lee said the company could not confirm a new deal with China.

Representatives from the two countries are meeting today and Wednesday in Annapolis, Md., for the Strategic Economic Dialogue, the twice-yearly meeting to discuss trade and investment issues.

The meetings will be led by U.S. Treasury Secretary Henry Paulson and Chinese Vice Premier Wang Qishan.

On the eve of the gathering, U.S. and Chinese companies Monday announced more than 30 business agreements in industries ranging from automobiles to telecommunications.

Those deals come at a time when the U.S. trade deficit with China climbed to more than $250 billion last year, and both sides are under pressure to address the imbalance.

The meetings are also expected to produce a long-term agreement for cooperation on energy and the environment.

As for oil prices, Paulson is pushing China to lift price controls on domestic fuels to help alleviate the surge in oil prices worldwide.

China's price controls on fuel are contributing to persistent gasoline and diesel shortages throughout the country, Paulson said recently.

However, Hainan's Chen defended the price controls. He said some government intervention into oil prices is appropriate because the international price system is abnormal and the big oil exporters opportunistic.

Chen said soaring oil prices are still having a serious impact on Chinese carriers, which like airlines elsewhere are trying to cut costs and save on fuel consumption, and have imposed passenger surcharges.

Kristi Heim: 206-464-2718 or kheim@seattletimes.com

The Associated Press contributed information to this report.