Trump to take home deals worth $250 billion in first China trip

news
10 November 2017

President Donald Trump on his first official visit to China is reported to have garnered business deals worth a combined $250 billion, involving Boeing, Qualcomm and China Energy Investment.

Trump, who arrived in Beijing on the second leg of his Asia tour, witnessed the signing of multi-billion dollar deals by US planemaker Boeing Co, General Electric Co and chip giant Qualcomm Inc.

Boeing signed an agreement on Thursday to sell 300 planes to China Aviation Supplies Holding Company worth $37 billion at list prices.

State-run China Aviation Supplies, which leases planes to Chinese airlines, said the order would include 260 B-737s, 40 B777s and B787s. It is not clear whether these orders are fresh ones or include some of the existing but yet undisclosed orders.

Boeing had 334 orders by unidentified customers as of 24 October, of which 290 were for the 737 narrow body aircraft.

Qualcomm signed non-binding deals worth $12 billion with Xiaomi, OPPO and Vivo, three Chinese handset makers the firm said it had ''longstanding relationships'' with. Qualcomm already earns more than half of its revenues in China.

Steve Mollenkopf, Qualcomm  chief executive, said the firm had a longstanding relationship with the three smartphone makers, adding that the move fits China's own ambitions to boost its domestic industry.

''We are continuing our commitment to investing and helping advance China's mobile and semiconductor industries,'' he said.

Earlier on Thursday, aircraft engine marker General Electric said it had signed deals worth $3.5 billion in China, including an agreement with Juneyao Airlines Co Ltd and ICBC Leasing, the leasing arm of state bank Industrial and Commercial Bank of China Ltd.

China Energy Investment Corp, the world's largest power company by asset value, has signed a memorandum of understanding (MoU) to invest $83.7 billion in shale gas, power and chemical projects in West Virginia, the US state said on Thursday.

The agreement was the biggest among a slew of deals signed during US President Donald Trump's state visit to Beijing. The total value of the deals done during Trump's trip could be as much as $250 billion.

The gas and power agreement marks the first overseas investment for newly founded China Energy, which formed from a merger of China Shenhua Group, the country's largest coal producer and China Guodian Corp, one of its top five utilities.

These deals, however, are only on paper and it is to be seen whether Beijing lives up to the high price tag that would involve huge foreign exchange outgo and reduce China's huge trade surplus with the US.

Beijing's business proposals follow Trump's criticism over Beijing's failure to address a ''shockingly high'' trade deficit with the world's second-largest economy.

China's trade surplus with the United States for September alone stood at a massive $34.6 billion, which Trump last week called ''embarrassing'' and ''horrible.''

China's commerce minister Zhong Shan was quick to react. ''This is truly a miracle,'' he said at a briefing in Beijing.

The US-China dispute, however, is long-standing and has to do more with China's trade and currency policies as also the growing interference of China's ruling Communist Party in the way foreign firms function.

Despite opening up of the economy and its entry in the World Trade Organisation, China still remains aloof from foreign businesses and many long-standing demands, including unfettered access to US businesses, cybersecurity and the rule of law, remain elusive.

''This (deal) shows that we have a strong, vibrant bilateral economic relationship, and yet we still need to focus on levelling the playing field, because U.S. companies continue to be disadvantaged doing business in China,'' Reuters quoted William Zarit, chairman of the American Chamber of Commerce in China, as saying.

US tech companies like Facebook Inc and Google are mostly blocked in China. Automakers Ford Motor Co and General Motors must operate through joint ventures, while Hollywood movies face a strict quota system.





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