Chinese premier visits Airbus as France waits for contracts

[Felix the Cat]

Chinese premier visits Airbus as France waits for contracts (http://newsfromrussia.com/world/2005/12/05/69167.html)

Chinese Premier Wen Jiabao toured the assembly plant of the giant Airbus A380 [in Toulouse] on his arrival Sunday in France for an official visit that kicked off with the signing of a protocol opening the way to business projects worth billions of dollars.

Starting his trip, unusually, in this southwestern city, Wen underscored the business-first accent of his first official visit to France, which has courted China hard and now hopes for a concrete show of friendship, replete with contracts.

The accord Wen signed makes no solid commitments but provides a framework for a range of projects from aircraft sales to subcontracting, including, notably, an eventual assembly plant in China, officials here said.

Accompanied by Airbus chief Gustav Humbert and the head of the A380 program, Charles Champion, Wen toured the giant aircraft's assembly plant. He then visited the headquarters of satellite maker EADS-Astrium before heading to Paris.

"The Chinese prime minister saw for himself the importance and power" of Airbus, said Transport Minister Dominique Perben, among French officials who accompanied Wen on his tour.

There were expectations that an order for A320s, the mid-sized passenger jet, could be announced in Paris on Monday.

The European plane maker is looking to China to balance last month's purchase of 70 Boeing jets with a sizable one for Airbus, which is controlled by European Aeronautic Defence and Space Co., or EADS. The official China Daily reported Thursday that a major order for A320s was expected during Wen's visit.

In the coming years, the rapidly expanding China will need some 2,700 aircraft, Airbus officials say, and Airbus is looking to capture 50 percent of the market.

Airbus sold five of its superjumbos to China Southern Airlines Co. earlier this year.

Wen also will visit Marseille and the resort towns of Nice and Cannes, but more for business than pleasure, during his French stay which ends Wednesday.

He flew to the French capital after his Toulouse tour Sunday and was to meet with President Jacques Chirac on Monday, as well as Prime Minister Dominique de Villepin, who was hosting a formal dinner.

France is hoping to cash in on China's growing needs in a variety of sectors. The French president visited China last year, after a January visit to France by Chinese President Hu Jintao. The two countries launched a "strategic global partnership" and celebrated each other in a year devoted to each other's culture.

France has worked to lift the EU arms embargo imposed on China after the 1989 Tiananmen Square crackdown, when Chinese troops killed hundreds of protesting students and workers. Foreign Ministry spokesman Jean-Baptiste Mattei has called the embargo an "anachronism that does not reflect the true state of relations between China and the international community."

However, human rights issues are expected to be brought up, too.

Wen's agenda includes time out Monday for cultural encounters at the elegant Orsay Museum and elsewhere in subsequent days. But the accent is on business.

Tuesday takes Wen to the south of France for visits to Eurocopter and the site of an experimental fusion reactor to be built in Cadarache, near Marseille.

Before leaving Wednesday from Nice for Bratislava, Slovakia, Wen is to take in a visit of Alenia Space, Alcatel's satellite systems arm, in Cannes. Meetings and dinners with local officials also were planned, AP reported.

[Felix the Cat]

(IIRC, Boeing has plants in Japan as well)

Airbus may build jets in China (http://www.smh.com.au/news/Business/Airbus-may-build-jets-in-China/2005/12/05/1133631185235.html)

Airbus has agreed with Chinese Premier Wen Jiabao to study the possibility of setting up an assembly line in China - a move that could see its jets being built outside Europe for the first time.

Wen signed an agreement to carry out a feasibility study for the project at the start of a European trip expected to unlock provisional Chinese orders for 70 A320-family single-aisle Airbus aircraft worth $US5 billion ($A6.7 billion).

Under the plan, signed during a tour of the European aircraft-maker's giant assembly plant in Toulouse, south-western France, Airbus and Chinese authorities will review over six months whether to set up a second A320 assembly line in China.

Airbus planes are assembled in Toulouse or Hamburg, Germany.

Airbus said it had committed to boost fourfold the value of components it buys in China to $US120 million ($A162 million) by 2010.

It has already promised China a 5 per cent share of the work to build the fuselage of its latest model, the mid-sized A350.

Fanning French hopes for a cluster of aerospace deals this week, Wen began the three-day French leg of his visit by flying directly to Toulouse, the home of the country's high-tech aerospace and space industries.

"It's the market where you have to be," Airbus China chief Laurence Barron told Reuters, as Wen inspected the first A380 superjumbo due to be delivered to Singapore Airlines next year.

"One in six planes sold this year will go to China. Next year that will be one in five. We have 30 per cent of their fleet now and hope that will rise to 50 per cent in coming years."

The A380, capable of seating 555 passengers on its twin decks in standard format, is Airbus's 21st-century flagship and China has already bought five in time for the 2008 Olympics.

But the single-aisle A320 family - actually four aircraft seating 107 to 185 passengers - is the workhorse series that provides the Toulouse-based firm most of its orders and profits.

Asian demand and a host of new low-cost airlines have shielded Airbus and its only major rival, Boeing, from the fallout from US airlines bankruptcies this year. The two companies are set for a record year despite a trade row over subsidies.

The possible Airbus order matches Boeing's 70-jet deal agreed before US President George W Bush's visit to China last month - seen as evidence that China is unwilling to let either side dictate terms in a fiercely competitive market.

French President Jacques Chirac is keen to gain France a firm footing in a country of 1.3 billion people that has rapidly become a vast new hunting ground where governments and big business are vying for access.

Political ties have steadily improved after a severe rift in the 1990s following the 1991 sale of French frigates to Taiwan. But France wants to develop economic and trade contacts faster.

Along with Germany, France is campaigning for the European Union to drop an embargo on arms sales to China that was imposed after the 1989 Tiananmen Square massacre in Beijing, in which tanks were sent to crush pro-democracy protests.

The program of Wen's visit also fuelled speculation of deals for Eurocopter, the world's largest civilian helicopter firm which, like Airbus, is owned by European aerospace group EADS, and equipment maker Alcatel's space unit.

Wen is due to sign commercial contracts after talks with Villepin.

Nuclear energy is likely to feature in discussions, but Wen told Le Figaro he hoped France would sweeten its proposals.

China is deciding whether to buy French, American or Russian technology to build four nuclear reactors for $US8 billion ($A10.8 billion).

Wen is due to go on to Slovakia, the Czech Republic and Portugal when he leaves France on Wednesday.