Boeing deal in Vietnam shows value of engagement

By Hu Weijia Source:Global Times Published: 2019/2/28 21:35:48

US President Donald Trump (first left) and his Vietnamese counterpart Nguyen Phu Trong (third left) applaud as Boeing Commercial Airplanes CEO Kevin McCallister (second left) exchanges documents with VietJet CEO Nguyen Thi Phuong during a ceremony at the Presidential Palace in Hanoi on Wednesday. Photo: VCG

Given the US and North Korea failed to reach an agreement in Hanoi over the issue of denuclearization, Vietnam's promise to buy 110 aircraft from US plane producer Boeing Co became the biggest achievement during US President Donald Trump's high-profile visit to Vietnam.

With denuclearization as his main goal in Vietnam, Trump still showed great interest in making money for US companies on the sidelines of his summit with North Korean leader Kim Jong-un. This is understandable. 

It seems that orders for Boeing aircraft are of more practical significance for the US business community, compared with the summit itself.

Chinese companies are pleased to see the aircraft order and should thank Trump for his hard work in Vietnam.

Some statistics show components and parts made in China have been installed inside thousands of Boeing aircraft in use around the world. Chinese companies have participated in the manufacturing of almost all types of Boeing aircraft such as the 737,747,767,777 and 787 families.

On the sidelines of the summit, Vietnam's VietJet Aviation JSC reportedly signed a deal to purchase 100 737 MAX planes worth $12.7 billion. Such agreements are likely to benefit Chinese plants and suppliers. 

In December, Boeing opened a new "completion and delivery center" in Zhoushan, East China's Zhejiang Province, where 737 planes can complete their interior work. China can take this as a starting point to further integrate itself into the global production chain of 737 planes. 

As an important part of the value chain, Chinese companies will be pleased to see Boeing's sales growth in Southeast Asian countries like Vietnam.

The deal between Boeing and Vietnam highlights a fact: the world has formed an integrated industry chain. As China tries to move up the value chain, some low-end manufacturers are shifting production to Vietnam. 

But China's role in the production of Boeing planes shows the country's status as a manufacturing power is still unshakable. Whether China can increase its production efficiency will decide the profit margin of Boeing's sales for aircraft.

China has no reason to be jealous of Trump's economic gain in Vietnam. In contrast, we hope the US can increase economic interaction with enterprises in Southeast Asian countries. Hopefully, everyone can learn that economic engagement is not a zero-sum game.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

Posted in: EYE ON ECONOMY

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