Following US President Donald Trump's executive orders implementing reciprocal tariff measures, the China-US trade war has escalated rapidly. China's response now extends beyond traditional trade items to impact the civil aviation industry, showing a more forceful stance than in previous disputes.
Boeing's historic relationship with China has served as a barometer for bilateral economic relations since Richard Nixon's 1972 visit. The recent refusal to accept new Boeing aircraft deliveries signals a significant shift in this relationship.
Boeing CEO Kelly Ortberg confirmed to CNBC that China has halted acceptance of new aircraft, with three 737 MAX planes originally destined for Chinese customers being returned from the Zhoushan facility to the US. This facility, completed in 2018, is a joint venture with Commercial Aircraft Corporation of China (COMAC), which ironically also competes with Boeing through its C919 model.
The disruption extends beyond new deliveries to parts imports, affecting major Chinese carriers with Boeing-dominated fleets, including SF Express, Xiamen Airlines, and China Southern. GE Aerospace, a key supplier for both Boeing and COMAC's C919 engine, acknowledged during its first quarter of 2025 earnings call that deliveries to Chinese customers would slow throughout 2025.
For Chinese airlines, options are limited, with only Airbus and Boeing offering viable large single-aisle aircraft. This explains why Malaysian and Indian carriers quickly purchased Boeing 737 MAX aircraft rejected by China.
While China promotes its domestically produced C919 as an alternative, production capacity remains limited, with only 16 units delivered by the end of 2024, compared to Boeing's monthly output of 30 MAX aircraft. The C919's operational efficiency also lags, with daily utilization averaging 6.5 hours versus 9.8 hours for the 737 MAX during peak travel season.
China's decision to suspend Boeing purchases creates challenges for its own aviation sector, which already faces strong competition from the country's high-speed rail network. Chinese airlines are unlikely to welcome complete dependence on Airbus, suggesting the current measures may prove temporary despite the intensifying trade conflict.
Article edited by Jerry Chen
