November 2, 2018 / 11:13 AM / 16 days ago

Boeing's China plant to start operations in December

A Boeing logo is pictured during the European Business Aviation Convention & Exhibition (EBACE) at Geneva Airport, Switzerland May 28, 2018. REUTERS/Denis Balibouse

SHANGHAI (Reuters) - Boeing Co (BA.N) will start operations at its 737 completion plant in China next month and Air China (601111.SS) (0753.HK) will take delivery of the first plane produced there, the U.S. planemaker said on Friday.

Boeing invested $33 million last year in a joint venture with the Commercial Aircraft Corp of China (COMAC) to oversee the plant, taking a majority stake. The plant, in the eastern city of Zhoushan, will install interiors and paint liveries.

Boeing’s comments were first reported by Chinese media outlets on Friday after a media visit to the plant, and confirmed by a company spokesman.

State-backed ThePaper.cn quoted Boeing China President John Bruns as saying that the factory will deliver only one aircraft in 2018 and then gradually increase output until it hits a delivery target of 100 planes a year.

Boeing and its European rival Airbus (AIR.PA) are expanding their footprint in China as they vie for orders in the fast growing aviation market. Airbus has a A330 completion plant in the eastern city of Tianjin.

Boeing also renewed production contracts for the 737 with AVIC Aircraft 000768.SZ and Shanghai Aircraft Manufacturing Co Ltd, and recognized five new Chinese companies as eligible suppliers during a ceremony at Zhoushan, ThePaper.cn said.

Analysts have expressed concerns that Boeing could eventually be affected by ongoing trade disputes between the United States and China although the planemaker’s products have not been hit by Chinese tariffs.

Reporting by Stella Qiu and Brenda Goh; Editing by Susan Fenton

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