In the meantime China has the leverage to play Boeing and Airbus against each other and benefit from knockdown prices. The two manufacturers recognize that selling aircraft in China also has political considerations. "In the Chinese market it's the presidents and premiers who buy the airplanes," Eckes said. Boeing orders in particular are seen as being sensitive to the ups and downs of relations between Beijing and Washington. And big sales can also be tied to high profile political visits, such as the US$1.3 billion deal to buy 21 Airbus jets signed by President Hu Jintao in Paris in January.
At the heart of the current sales pitch are the so-called next generation aircraft – Boeing's mid-size 7E7, and Airbus' A380 superjumbo, both of which have yet to actually fly.
Boeing has high hopes for the 7E7, which it says is 20% more fuel efficient than the competition. In a nation dependent on fuel imports, this is significant. Boeing, however, has yet to ink a 7E7 sale.
Airbus is pushing the A380 to Chinese buyers and, said Eckes, will bend a long way to seal a deal. "I'm sure they would discount the price substantially – by at least 40% off the list – in order to get an order from China," he said. Both Airbus and Boeing have billions of dollars in development costs to cover, so any sale is important.
The two are also eager to have their new aircraft flying in China in time for the 2008 Beijing Olympics and the Shanghai World Expo in 2010. "The A380 is an ideal vehicle for transporting tens of thousands of people attending these events," said Airbus spokesman Ming Gu, whose company forecasts a China market for up to 50 superjumbos.
Boeing disagrees. "The middle-sized market is where the biggest demand is in China and the 7E7 is designed to support that demand," said Boeing's Ross Ma. Aside from passenger aircraft, another growth area is expected to be China's air cargo market. Given its sheer size and soaring output levels, China is massively lacking in airfreight capacity, said Eckes.
According to Boeing, that means China's domestic air cargo market alone, currently about 2 million tons a year, will grow by more than 10% annually to 2020. Meanwhile, as the big boys fight it out, manufacturers of smaller 'commuter jets' are also eyeing China – among them Embraer of Brazil and Canada's Bombardier.
With 111 new provincial airports due to open by 2015, Embraer, which has a JV production center in the northern city of Harbin building 50-seater jets, forecasts a market for more than 600 small jets in the next 20 years.
Ian Thomas of the Center for Asia Pacific Aviation in Sydney said that not enough attention is paid to the market for smaller aircraft.
"China has the length of routes and high volume of non-mainstream routes that can really propel that end of the market," he said. "The regional market is probably the big untapped area at the moment."
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