Chinese Sign Airbus Contract for 150 Planes
By Elaine Meinel Supkis
Remember the happy talk by Bush and Condi about the 150 plane contract for Boeing? Then it was 70 and then the Chinese growled that they were still negotiating? Well, the American press is mum about the negotiations but Airbus in Europe just announced they won the 150 plane contract. Where are the headlines? Heh. Ignorance is a fool's errand.
From the BBC:
European aircraft maker Airbus has agreed to sell 150 A320 planes to China in a deal worth almost $10bn (£5.7bn)Remember the stupid boycott of all things French? Now we dine on cheap McDonald's while the Chinese eat haute cuisine! The many stupid diplomatic gestures the Bush team engaged in are costing us most dearly. We will pay through the nose for this administration.
The agreement is a major boost for the manufacturer as it battles US rival Boeing for supremacy in the world's fastest growing aviation market.
The planes, seating up to 185 people, will be used by six Chinese carriers.
The deal was signed during a meeting between Chinese Prime Minister Wen Jiabao and his French counterpart Dominique de Villepin on Monday.
Aviation experts said the deal was worth about $9.7bn to Airbus.
Chinese officials said they were looking forward to an "ever closer" relationship with Airbus.Under Clinton, China bought 70% of their planes from Boeing. We used Boeing to plant bugs to spy on the Chinese on these planes which ticked them off greatly. We had to do a lot to placate them after the spy mess. Still, the Chinese patiently courted Bush....Until now. Since Bush refuses to condemn the Japanese for their WWII war criminal worship, since Bush backs the Japanese in the oil/gas exploration fracas, since Bush attacks only China about currency while ignoring the Japanese manipulation of the yen, the Chinese are going to start smacking us on the snout.
"We are very pleased to sign the record-breaking agreement with Airbus today and to be a part of this historic order for China," said Li Hai, president of China Aviation Supplies Import and Export Group.
Airbus and Boeing are both benefiting from huge demand for civilian aircraft in China, where annual passenger traffic is expected to rise to 500 million by 2010.
Airbus has already signed an agreement to increase industrial co-operation with Beijing.
Here is the Chinese take on the French/Chinese negotiations on many issues: From Xinhuanet:
PARIS, Dec. 6 (Xinhuanet) -- China and France signed on Monday 16 cooperation agreements concerning various sectors on the sideline of Chinese Premier Wen Jiabao's ongoing visit to France.I strongly suggest readers click on this and read the very long list of contracts, contacts, cooperative initiatives, declarations of friendship and unity. Our hamfisted attempts at subduing the French have not only failed, it has borne rotted fruit. We couldn't afford to alienate the French who were 100% right about opposing the illegal and idiotic war in Iraq which is sinking our economic as well as moral ships! They tried to take the car keys away from America's drunk driver President and we kicked them in the shins. Now we get to watch the Chinese drive off into the sunset with the French.
Way to go!
The important thing here, to me, is the last line in the article: the Europeans are going to build Airbus factories IN CHINA! This is the bottom line. It has two effects: all future contracts will be for ONLY Chinese-Airbuses unless Boeing does the same and internationally, the Chinese can sell their aircraft alongside the Europeans and not drop the price by very much, just enough to kill Boeing! And the European's profit margin will stay the same after the discounting! This is going to pretty much kill us. I predicted that the Chinese will insist on building the planes in China to save on costs--They have a perfect right to demand this. It makes total sense.
Capitalist Americans insist on the bottom line being the be all and end all of business. Now the Chinese will teach us some very harsh lessons about capitalism: if you don't control the country where your factories are, you don't control your factories. And if you withdraw, you lose not only your infrastructure but also your markets!
Here is why the Chinese are going to punish us for a long while: From the Arkansas Democrat
Economic officials from the world’s richest countries resumed their pressure on China to adopt a more flexible exchange rate and called Saturday for vigorous action against such threats to growth as high oil prices, protectionism and inflation.I am certain the Europeans had secret meetings with the Chinese concerning currency issues for the Americans and Japanese have been hammering them about currency stuff. They are in the same boat as the Chinese, actually, only at the opposite end. The Chinese have maintained parity while the euro had shot up in value, shutting Europe out of America and Japan, export-wise! The article notes that the Japanese and American co-conspiritors wanted to attack China even harder. The Europeans want a stronger yuan since China is flooding them with imports but they know where there real problems lie: the sick Japanese/American black box conspiracy to hide inflation by having Japan suck up all the American red ink without really paying for any of it, simply removing it from circulation.
Finance ministers and central bank governors from the Group of Seven nations, meeting for the final time this year, singled out China in their closing statement as they warned about excess volatility and disorderly movements in exchange rates.
“We expect that further flexible implementation of China’s currency system would improve the functioning and stability of the global economy and the international monetary system,” the G-7 said.
The statement was stronger than one following the group’s September meeting, which welcomed China’s decision in July to let its yuan currency trade more freely but stopped short of pressing for further changes.
European Central Bank President Jean-Claude Trichet, who met with fellow G-7 central bankers Saturday, said their latest comment was “in the continuity of the message that we have been giving.”
However, the statement still appeared to fall short of the wishes of some members of the G-7, which includes Britain, the United States, Japan, Italy, Germany, France and Canada.
International Monetary Fund head Rodrigo Rato had earlier waded into the interest rate debate that has divided finance ministers and central bankers after the European Central Bank’s decision Thursday to increase rates by a quarter of a percentage point to 2.25 percent. Some European officials had warned that such a move could harm already weak economic growth in the region.Up until the black box took shape, all the finance ministers in the world raised or lowered interest rates to prevent inflation and bubbles. Now they keep the rate well below inflation to sustain bubbles.
Historically, this action is most dangerous for then vast reserves of uncollectable debts pile up suddenly and eventually cause the entire system to collapse and the value of the currencies to evaporate rapidly. We see signs of this already. Since Bush started pouring on the red ink, the price of gold which is the world's alternate currency, has skyrocketed. Namely, dollars are worth less and less in the real world. During the years of Clinton economic stability, the price of gold either stagnated or even dropped.
Last time we went through the dollar devalution cycles, gold shot up and dollars fell. Before Bretton Woods II, gold shot up to over $800 an ounce during a time when, due to oil costs, inflation raged in America. When Nixon ran up increasing red ink thanks to the Vietnam War and we were hit with an oil boycott the same year we hit the Hubbert Oil Peak here, the price of gold shot up, too. So it is today. Inflation is very much here and very much in action, we can see it all over the place, it is just not registering with the financial buzzards who are running this rat-trap machine.
To return to homepage click here
To read more financial news click here