A week after being installed as US president in January, Donald Trump ordered a review of 2 aircraft purchases – fighter jets from Lockheed Martin Corp and Air Force 1 presidential aircraft.
The price of the Lockheed F-35s has dropped – probably wisely given a Bloomberg report that Mr Trump preferred a Boeing competitor – and Mr Trump appears to be getting along fine with Boeing.
Both companies fit into Mr Trump’s ‘Make America great again’ & ‘Buy American’ campaigns. Still, he & his country might like to consider a newcomer to aircraft manufacturer, at least for passenger planes: the great currency manipulator, China.
State-owned Comac (the Commercial Aircraft Corp of China Ltd) gave its C919 short-medium-range commercial trunk airliner its maiden flight over Shanghai on Friday. The plane’s all-economy-class layout has 168 seats, hybrid class 156 seats, with a single aisle. The basic version is designed to cover a range of 4075km, the enhanced version 5555km.
Comac has designed the C919 as a direct competitor for Boeing’s 737 and the European Airbus A320. The one other potential competitor, Mitsubishi Aircraft Corp of Japan, said in January it had pushed first delivery back from mid-2018 to mid-2020 for its much smaller (78- & 92-seat versions) MRJ (Mitsubishi regional jet).
I happen to think the US has been a far greater currency manipulator for far longer than China, and that it’s also been a trade bully since the time of the Boston tea party in 1773. Neither of the Asian aircraft developments had anything to do with Mr Trump in their evolution, starting well before his elevation, but the trade-pressuring president might like the price tag of the C919, put at $US50 million – under half the price of the Boeing 737 or Airbus A320.
That’s especially so if the US Federal Reserve starts to raise its funds rate, which would have an immediate, sharp impact on US Government debt.
China is also looking at African nations as buyers of its new aircraft which, in economic relationship terms, would raise the profile of the China-sponsored Brics (Brazil, Russia, India, China & South Africa). And it would naturally look to Asia for buyers.
It’s the kind of economic event that carries far greater weight than tough political talk because it offers a concrete alternative for trade, leads to more value-creating innovation & research and – whether wall builders like it or not – advances trade and spreads wealth.
It’s akin to a sister venture of the revived Silk Road across Asia to Europe and the new Maritime Silk Route, which will run around to several new Chinese-financed ports & rail links along the north-eastern African coast, portending greater international networks.
BBC, 5 May 2017: China’s first big passenger plane takes off for maiden flight
Bloomberg, 17 February 2017: How close to Trump is too close for Boeing?
Bloomberg, 27 January 2017: Trump’s Pentagon chief orders F-35 jet, Air Force 1 review
Bloomberg, 20 October 2014: Mitsubishi Aircraft unveils Japan’s first passenger jet
Mitsubishi, 23 January 2017: MRJ’s latest development status
Attribution: Company website, BBC, Bloomberg, Mitsubishi.