China now exports more than it imports – a lot more. Even most American economist are starting to recognize that the “China runs a surplus with the US but its overall trade is balanced” argument is now a bit dated.
China does import a lot planes. Aviation is one area where the Chinese concede the US might have a competitive advantage even at current exchange rates. So importing more American and European planes is one way China might chip into its surplus.
Or maybe not. The government of China has decided to create a Chinese airbus – a state company to make big planes to compete with Boeing and Europe’s own Airbus.
China's long-term ambitions to produce large planes won’t immediately affect Boeing's sales, let alone the trade balance. It will likely take China 15 to 20 years to learn how to make large planes.
Indeeed, that it what makes the politics of this interesting. Neither Boeing nor Airbus (or their workers) really wants a third participant in the market, and certainly not one with access to the deep pockets of China's government. Airbus gets some state aid, but it is currently handicapped by the strong euro. China state firms … well … aren't exactly handicapped by a strong currency.
At the same time, China is expected to spend a lot of money buying planes over the next 15-20 years. Richard McGregor:
The European group's latest forecast places China second behind only the US in both the number and value of jets needed between 2006 and 2025, with a market for 2929 large aircraft worth $US349 billion ($439 billion).