American aviation company Boeing recently opened its newest production facility in China. The company decided to build this new facility in China despite the looming effects of the country's bitter trade war with the United States.
Regardless of the trade war, some market analysts have said that this is an excellent investment for Boeing. Additionally, by building this facility in China, it simply shows how the company is committed to its top export market. This strategy will eventually offset the negative effects of the trade war.
Boeing calls this new facility its "completion and delivery center. The facility is located in Zhoushan, an island just south of Shanghai. On Saturday, the facility rolled off its first finished jet which is a 373 MAX and is slated to be delivered for Air China Ltd.
Outside of this new facility is a billboard that reads "The future is built here." Despite this mantra, the new Zhoushan facility does not actually build planes. Instead, the facility paints and fits the interior of the jets which are flowing from Boeings factory located in Renton, Washington before being delivered to various Chinese airlines.
According to the Wall Street Journal, the facility highlights the problems faced by Boeing in the middle of the trade war. Chief among these problems is the issue of the transfer of technology.
According to the Center for Strategic and International Studies China expert Scott Kennedy, Boeing is walking a fine line in its decision to build the Zhoushan facility. Mr. Kennedy added that the company must continue to impress China, its biggest and probably most important market, without risking its reputation at home. It is important to note that since taking office, U.S. President Donald Trump has urged American companies to build more at home and less in China.
According to Boeing China President John Bruns, the Zhoushan facility will have an annual output of 100 jets. The facility employs 300 people when running at full capacity.
After several billions worth of tariffs levied against each other's goods, China and the United States have decided to declare a trade truce that will run for 90 days. According to people with insider knowledge about the deal, the truce was called in order to make room for more talks as part of the effort to resolve the trade war between the world's two biggest economies.
