US aircraft exports to China nosedive amid deteriorating relations

New Delhi: US exports of aircraft to China has taken a major hit with deteriorating relations between Beijing and Washington and the decoupling is likely to cause a further decline in aviation trade in the future, according to a report. Since 2018, China and the US have been locked in a bitter trade war, and the two countries are fiercely competing in technology and defence, and as well as for international influence. According South China Morning Post, citing data from the United Nations COMTRADE Database, in 2022, US exports of aircraft, engines and parts to China, its largest export market, were worth $5.53 billion, a small rise from $4.71 billion in 2021, but less than a third of the record $18.22 billion shipped in 2018. “I do not see decoupling happening in the short term due to the close link between China and the rest of the world. But in the long term, decoupling is a trend that will continue,” the media outlet quoted Henry Gao, an associate professor of law at Singapore Management University, and a long-time researcher of international trade issues, as saying. Exports plunge due to ‘geopolitical differences’ According to the US-based Peterson Institute of International Economics (PIIE), the plunge of US aviation exports to China, once a big buyer of Boeing jets, is owing to “geopolitical differences”. “Out of dependency concerns, China may be especially hesitant to buy Boeing products, after observing how Western countries imposed sanctions on exports of aircraft parts and services to Russian commercial airline fleets, following Russia’s invasion of Ukraine in February 2022,” South China Morning Post report quoted PIIE as saying in a report last month. Stephen Olson, a senior research fellow at the Hinrich Foundation and a former trade negotiator with the Office of the US Trade Representative, said that the decline in trade could be a case of interests diverging when it comes to civilian aircraft. “China has prioritised the development of a domestic competitor and China’s home-grown C919 appears capable of favourably competing with Boeing’s workhorse aircraft such as the 737. As the C919 comes online, demand for Boeing jets is likely to decline further,” Oslon told the media outlet. Boeing’s sales in China have been declining since 2018. Its 737 MAX aircraft only returned to service in January after being grounded for nearly four years due to two deadly crashes in Indonesia and Ethiopia. In an interview to Bloomberg in January, Dave Calhoun, chief executive of Boeing, had voiced hopes that US Secretary of State Antony Blinken’s visit to China would lead eventually to “robust” plane orders. However, Blinken subsequently postponed his visit to Beijing after a suspected Chinese spy balloon was tracked flying across the US in what Washington called a “clear violation” of its sovereignty. Other US business executives in aviation have argued a loss of access to the Chinese market would mean a reduction in US manufacturing output, falling revenues for the firms involved, and thus American job losses and reduced research and development spending. Delicate balance in economic ties Gao said it would be difficult for the US to manage economic relations with China while stepping up export controls. “That would require a delicate balance which I am not sure is possible under the current political environment,” Gao told South China Morning Post. “But the US could learn from the EU’s approach, especially the recent call to de-risk rather than decouple from China by EU Commission President Ursula von der Leyen,” Gao added. Ahead of her three-day visit to China with French President Emmanuel Macron, which starts today, Von der Leyen said it was not viable to decouple from China, but it was critical to focus on reducing the risks posed to Europe. Economically, the European Union needed to “rebalance” the relationship and reduce its reliance on China, she said. Wary of growing restrictions on its access to US technology, China has been focusing on increasing its manufacturing capability to reduce reliance on imports With inputs from agencies Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.