By Annex Asia Publishing
In the wake of buttressing Sino-British ties, European countries have begun to jostle to attract China’s cheque book. It comes as no surprise that Germany has arrived first in best-dressed, already well-established as China’s largest European trading partner. French President Francois Hollande is scheduled to visit next week, signaling a pecking order of state relations.
Merkel’s trip also reveals changes to China’s economic structure and a desire to emulate technological success. Germany boasts industrial strengths unrivalled by even the most developed states, long admired by Chinese officials. The cohort of guests included top representatives from Volkswagen, Siemens and Deutche Boerse.
The big news from the visit has been China’s massive aircraft contract, signed on Thursday. Airbus and China’s state-owned China Aviation Supplies Holding Group have signed a deal for 100 A320 aircraft and 30 A330 jets. Other side deals include the commitment to buy 100 H135 helicopters. The aircraft purchases are estimated to be worth around $17 billion dollars. Airbus’ rival- the Seattle-based Boeing- announced a record purchase of 300 aircraft totaling almost $40 billion dollars earlier this year.
Other deals made so far on the trip include cooperation between Nokia and China Mobile, and Chinese bank ICBC and Volkswagen. Deutsche Boerse, the operator of Germany’s stock exchange will also establish a JV with China Foreign Exchange Trade System.
Whether Beijing may be able to leverage its position between the two aviation giants for beneficial terms or chances for technological spillover is unclear. However, with China expected to add another 6,330 new aircraft (around $950 billion worth) and 5,000 helicopters to its fleets in the next 20 years it is certain that competition will remain fierce.
Airbus already has an assembly facility in Tianjin, in the news recently for industrial hiccups. Although such specialist manufactures are well protected, China no doubt wants to learn as much as possible from the likes of Germany. This week, Li Keqiang stated, ‘We need to learn advanced technologies and concepts from Germany’. Merkel has already made 8 visits to China over the course of her 10 year term in office, behind this, trade and technology have been the backbone of strengthening ties.
China’s continued push into advanced manufactures necessitates both knowledge- and standard-protections. Quality control improvements will be a key area for focus throughout the transition.
SOURCES:
http://tribune.com.pk/story/982130/china-signs-giant-airbus-deal-as-merkel-visits/
http://www.reuters.com/article/2015/10/30/us-airbushelicopter-order-idUSKCN0SO0MG20151030
http://www.euronews.com/2015/10/29/china-to-buy-130-airbus-planes/
http://www.ecns.cn/business/2015/10-30/186385.shtml
http://fortune.com/2015/10/29/airbus-china-deal/
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