China inks deal to buy 300 Boeing jets

Chinese companies have reached an agreement with Boeing to purchase 300 jets and build an aircraft assembly plant in China in deals signed during President Xi Jinping's visit to the United States, the official Xinhua news agency said Wednesday.

The order for 250 narrowbody 737 aircraft and 50 widebody aircraft, valued at about $38 billion, was announced as Xi toured Boeing's Everett, Washington factory.

China Aviation Supplies Holding, ICBC Financial Leasing and China Development Bank Leasing inked the jet purchase agreement after Xi's arrival in Seattle, Xinhua said.

State-owned Commercial Aircraft Corporation of China, which is better known as COMAC, also signed a cooperation agreement with the U.S. plane maker to build a 737 aircraft assembly center in China.

Xi planned to visit Boeing's Paine Field assembly plant during the Seattle leg of his trip before moving on to Washington, D.C. to meet President Barack Obama.

Machinist union members who say they stand to lose work to China planned to protest on Wednesday. However, Boeing said on Tuesday it doesn't expect to lay off or reduce staff related to the 737 because of the new factory in China.

"Boeing's strong 40-year relationship with China, one of the world's largest airplane markets, is expanding U.S. exports to that country and supports tens of thousands of American jobs,” said CEO Ray Conner in an earlier statement on Xi’s visit.

The assembly plant would be Boeing's first in China and signals an attempt to match its European rival Airbus's Chinese presence as the two competitors step up their efforts to win more business in the country's lucrative aircraft market.

Airbus opened its first assembly line outside of Europe in 2008 with a Tianjin facility that turns out four A320 aircraft per month. In July, Airbus signed a deal for a second completion and delivery center for A330 jets.

Boeing sold a record 155 airplanes last year to customers in China, and so far this year, a quarter of its jets have been delivered there. The company predicts that over the next two decades China will overtake the U.S. as the world's biggest plane market with demand for 6,330 new airplanes worth an estimated $950 billion.

China's state planning agency also signed an agreement with Boeing to promote cooperation in the aviation industry, Xinhua said.

Shares of Boeing Co. fell $1.94, or $1.5 percent, to $132.05 in afternoon trading Wednesday in New York.

Al Jazeera and wire services