Airbus deal may make China a production hub
(AFP)
Updated: 2005-12-07 07:40

"There have been examples in the past of some parts suppliers returning from China having seen piracy of their technology."

However, if Airbus does proceed with producing jets in China, Thomas said the European conglomerate may well gain an edge over Boeing, its arch rival from the United States.

"There is some political resistance in the US... there are political issues concerning protection of jobs within in the US," said Thomas.

"Boeing is hamstrung, it's a private company but because of its size and importance to the US economy it is essentially an arm of the US economy."

As part of the wide-ranging accord signed during a visit to France by Chinese Premier Wen Jiabao, Airbus also offered China a five percent stake in its A350 aircraft program.

The A350 is the European group's response to Boeing's new generation 787 "Dreamliner" passenger jets.

Airbus has yet to receive any orders from China for its A350 aircraft whereas Boeing signed a deal with Beijing in January to sell 60 of its "Dreamliners".

"That (A350 orders) will be the next big milestone achievement for Airbus in the Chinese market," said Derek Sadubin, another analyst with the Centre for Asia Pacific Aviation.

In the battle for supremacy of the skies in China and around the globe US aerospace giant Boeing says it has booked 800 commercial plane orders in the first 11 months of 2005, giving it an apparent lead over European rival Airbus.

Airbus, which has been the market leader in recent years, says it has booked 494 orders as of October, compared with 674 for Boeing for the same period. Airbus is due to release new figures this week.

But the new course taken by Airbus to more closely integrate China into its operations may just be enough to allow it to overtake its US rival, especially in China.

Boeing, which has over 70 percent of China's market, predicts the industry will need 2,600 new planes, quadrupling the nation's present fleet, over the next 20 years.

Airbus, a government-run aerospace conglomerate that includes Germany and Spain, wants to grab 50 percent of the market share over the next eight years.