(Xinhua) – HONG KONG – Air China, China’s leading carrier listed in Hong Kong, said late Friday that it would pay $1.398 billion to buy 20 Boeing 737-800 planes.

In a statement filed to the Hong Kong stock exchange, the carrier said the cost would be “payable by cash in installments” and it would “take delivery of the Boeing Aircraft in stages from 2013 to 2015.”

“The aircraft price is subject to price escalation by applying a formula. Boeing Company has granted to the Company (Air China) significant price concessions with regard to the Boeing Aircraft,” said the statement.

The transaction will be funded through cash generated from Air China’s business operations, commercial bank loans and other financing instruments of Air China, said the statement.

The Beijing-based airlines said the transaction would expand its fleet capacity with an increase of around 5 percent based on available tonne kilometers of Air China by the end of 2009.

In particular, the deal would reinforce Air China’s market share in the Chinese domestic market, and would also increase frequency of flights for a number of domestic and neighboring international routes, it added. – read more at ChinaDaily.com…

Boeing's new 787 will be a big seller in China

CHICAGO (Xinhua): China will continue to be both major market and partner to the United States, supporting thousands of US jobs and contributing significantly to the US balance of trade, said CEO of a Fortune 100 company in Chicago on Wednesday.

James McNerney Jr, chairman, president and CEO of the Boeing company, made the statement at a luncheon organized by The Chicago Council On Global Affairs as part of its Corporate Program: Focus on China.

McNerney started his speech by commending Secretary of State Hilary Clinton and Treasury Secretary Tim Geithner for the progress their teams made this week at the Sino-US Strategic and Economic Dialogue in Beijing.

“It is vitally important that US leaders are engaged in supporting US trade relationships. Expanded engagement in international markets, combined with the recovery of our financial service markets, is critical to accelerating our overall economic recovery,” he said.

In 1972, then President Richard Nixon landed in Beijing aboard Air Force One – a Boeing 707 – marking the first visit of a US president to China. Boeing has been one of the few American companies present in China since diplomatic and economic channels were reopened.

“That Boeing 707 is truly the game-changing airplane of its time. China ordered ten Boeing 707 jetliners soon after the visit, setting in motion a tremendously productive relationship between a company (Boeing) and a country (China) – a relationship that continues today and in many ways has become symbolic of the four decades of cooperation between our two nations,” McNerney said.

When talking about the significant changes in China, McNerney said, “One of the most important changes in China that I have witnessed – the rapid growth in personal incomes. A growing middle class in China is dramatically reshaping the country’ s domestic economy and has global economic impact too.”

Regarding Boeing’s growing business with China, the CEO exclaimed, “China has bought more than any country in the world (except the US). It has a total of 1,560 airplanes (almost 53 percent of them are Boeing airplanes), and the average age of these planes is just six and a half years – meaning that China also has one of the youngest fleets in the region.”

Commenting on the relationship between China and the United States, he noted, “I believe the US and China are already interdependent and growing more so every day. In fact, our interdependence with China is key to the US achieving President Obama’ s goal of doubling America’s exports over the next five years – an increase projected to support two million American jobs at a time when we really need them.”

“I expect that the US-China relationship will always be complex, but that global interdependence in business will help keep both nations motivated to work out their differences constructively,” he added. – read more at ChinaDaily.com…

Scheduled to fly in 2016, the COMAC C919 will be China's first large commercial jetliner.

People’s Daily Online, April 23, 2010 – US Aerospace firm Hamilton Sundstrand said it has won a $1 billion long-term contract to provide the electric power generation and distribution systems for China’s first single-aisle C919 aircraft, beating rivals including General Electric Co.

A source close to the deal told China Daily that Hamilton Sundstrand will form a joint-venture partnership with Aviation Industry Corporation of China (AVIC) System Co Ltd to develop and manufacture the electrical system, as stated in a letter of intent signed on April 15 in Xi’an, Shaanxi province.

The C919, China’s first large commercial jetliner developed by the Commercial Aircraft Corporation of China Ltd (COMAC), is expected to take flight in 2016.

Shanghai-based COMAC aims to sell more than 2,000 of the 150-seat single-aisle planes over the next 20 years, challenging Airbus and Boeing in both the domestic and global markets.

Hamilton Sundstrand, a subsidiary of United Technologies Corp, estimated in a statement on its website that the deal would be worth more than $1 billion in revenue over the life of the program.

“Hamilton Sundstrand is honored to partner with COMAC to provide the electric system on the new C919 aircraft,” said Hamilton Sundstrand President Alain Bellemare.

“With this agreement, Hamilton Sundstrand continues to play a large role in the Chinese aviation industry’s rapid growth.”

The contract is expected to contribute to United Technologies Corp’s estimated 2010 earnings of between $54 billion and $55 billion for 2010.

United Technologies Corp, which also makes Pratt & Whitney jet engines and Sikorsky helicopters, said on Wednesday its first quarter profit jumped 20 percent, the first increase in a year as the industrial conglomerate cited its efforts to cut costs and boost productivity.

United Technologies rose $2.73, or 3.7 percent, to $76.93 in New York Stock Exchange trading on Wednesday.

Hamilton Sundstrand is a key supplier on COMAC’s 90-seat ARJ21 regional jet, including the electric power, high-lift actuation and fire protection systems. — read more at People’s Daily Online…

Joining the SkyTeam will help China Eastern Airlines fend off the competition from major rivals and share more resources with other members. (Agencies)

By Wang Ying (China Daily) – SHANGHAI – China Eastern Airlines said on Friday it would sign a memorandum of understanding to join global airline alliance SkyTeam.

“What we have signed is a preliminary agreement. And after a year when China Eastern fulfils all the requirements of SkyTeam, we will become its official member,” Luo Zhuping, company board secretary, told China Daily.

The Shanghai-listed airline had been the only one of China’s top three carriers not to be a member of any global alliance.

Analysts said joining the alliance will help the airlines fend off the competition from major rivals and share more resources with other members.

Liu Shaoyong, chairman of China Eastern, said earlier this week the company was in talks with all three global alliances, including Star Alliance and Oneworld. Sources with knowledge of the matter told China Daily that all three alliances were lobbying the carrier with favorable conditions.

Currently, both Shanghai Airlines and Air China belong to Star Alliance, and the two carriers share a lot of resources in term of customers, flight transition and air ticket booking on the platform. Guangzhou-based China Southern Airlines is member of SkyTeam.

“The airlines’ choice is easy to understand,” said Yao Jun, an aviation analyst at China Merchants Securities. “As former chairman of China Southern Airlines, Liu would like to join forces with China Southern to compete against the nation’s most profitable airlines, flag carrier Air China Ltd,” Yao said.

This also marks a major victory for SkyTeam which has sought to expand its membership in the Asia-Pacific region, one of the world’s fastest growing aviation markets. – read more at ChinaDaily.com…

Air Canada's overall capacity will increase 4 to 6 percent this year, while Asia will see a more-than-10 percent rise in capacity. (Agencies)

By Lu Haoting (China Daily)- BEIJING – Air Canada, the flag carrier of the North American country, said it will resume double daily services to Beijing and Shanghai in June and is planning to fly to Guangzhou in 2013 to cater to increasing travel demand between the two countries.

The Canadian carrier is expected to receive its first Boeing 787 Dreamliner in 2013 and is considering launching scheduled services between Guangzhou and Vancouver with a B787, the most fuel-efficient airliner built by Boeing, said Calin Rovinescu, chief executive officer (CEO) at Air Canada.

The Guangzhou service would make Air Canada the first North American airline to serve the southern city in the Pearl River Delta.

“China is amongst the most important international markets for us. The increased capacity to Beijing and Shanghai is a large commitment of assets, over $1 billion of assets,” Rovinescu said on Friday.

Rovinescu said the continued economic rebound in China made Air Canada “confident about taking a risk” by expanding capacity in China while the airline industry has just started to see signs of recovery from falling travel demand.

Another important driver is that the Chinese government granted Approved Destination Status (ADS) to Canada last December, he said. The ADS system simplifies visa application procedures for tourists and they can use ordinary passports to apply for tourist visas if they want to visit an approved country.

The number of Chinese tourists in Canada is expected to increase 50 percent annually by 2015 after ADS takes effect, according to figures from Conference Board of Canada.

Air Canada reduced its total capacity by 14 percent last year due to falling travel demand. Its overall capacity will increase 4 to 6 percent this year, while Asia will see a more-than-10 percent rise in capacity and China is seeing the biggest increase, about 25 percent, Rovinescu said. – read more at CHinaDaily.com…

By Xin Dingding (China Daily) – Beijing – The chief designer of the country’s first C919 jumbo jet has urged authorities to establish a multi-billion-yuan State fund to help boost the sales of homegrown airplanes.

More financial support from the government will bolster the domestic aviation industry, which is facing strong competition from foreign players such as Boeing and Airbus, said Wu Guanghui, vice-president of the Commercial Aircraft Corporation of China Ltd (COMAC).

China is forecast to need about 4,000 planes in the next 20 years.

State fund for homegrown jumbo jet urged

Major domestic airlines such as Air China, China Eastern and China Southern, as well as Sichuan Airlines and Hainan Airlines, have expressed strong interest and support in buying his company’s jumbo jet, Wu said.

The letter “C” in the title of the country’s first homegrown jumbo jet is said to stand for “China” as well as “COMAC”, while the first “9″ implies “forever” in Chinese culture and the “19″ stands for the jet’s maximum 190 seats.

The single-aisle jetliner is designed for short- to medium-haul flights of up to 5,555 km.

The draft design of the country’s first independently developed jumbo jet will be completed by this year and be put into production by next year, Wu had said earlier.

The plane is slated to test fly in 2014 and be ready for deliveries after 2016. COMAC, which was founded in 2008 to take charge of the country’s jumbo jet project, expects to sell 2,000 C919 planes at home and abroad in the next two decades, Wu said.

State fund for homegrown jumbo jet urged

“But what could harm the sales of the domestically made planes is that very few aircraft-leasing companies buy domestic airplanes and rent them to airlines,” he said in an interview with China Daily.

“Leasing is the major way for airlines to expand the fleet … and the situation will especially hinder small airlines, which are short of funds, from buying the cheaper homemade jets.”

Wu suggested that the government establish a State fund of at least 30 billion yuan to help homegrown jet buyers with their financing. – read more at ChinaDaily.com…

Shanghai's Hongqiao Airport

A new airport terminal in Shanghai started operation Tuesday ahead of the opening of the Shanghai World Expo amid the city’s efforts to build a “world-class” traffic hub.

The 360,000 square meter terminal with a new runway has 45 plane parking bays and an annual transport capacity of 40 million people, said Shen Xiaosu, deputy director of Shanghai’s Urban, Rural Development and Traffic Committee.

As of March 16, a total of 11 domestic carriers including Shanghai-based China Eastern Airlines, Air China and China Southern Airlines had moved their operations to the new terminal. The old terminal will be primarily used by some budget airlines and chartered flights to Japan and the Republic of Korea, according to the airport’s website.

Together with the opening of the new terminal on Tuesday, the extension of Shanghai’s subway line 2 linking with the new terminal also started operation, the airport’s website said. – read more at People’s Daily Online…

Hyundai, Kia stocks accelerate on fallout from Toyota debacle: Shares of Hyundai Motor and its affiliate Kia Motors continue to thrive despite the recent erosion of global stock markets, fueled by strong financial performance and turmoil at rival Toyota. (Via South Korea News.)

Expert: China’s space technology close to moon landing capability: After years of development, China’s space technology is close to moon landing capability, said Fu Yiqing, space expert and consultant to the Shanghai Institute of Space Propulsion (SISP). Fu, also a senior member of American Institute of Aeronautics and Astronautics (AIAA), said this during an interview with reporters from China News Service. New generations of Chinese taikonauts are studying moon landing technology. (Via China – People’s Daily Online.)

China seizes leading hacker training website: Police in central China’s Hubei Province have seized the country’s biggest hacker training website and arrested three suspects, the local public security department said. The three, who ran the Black Hawk Safety Net, were suspected of offering online hacker tools, a crime that was newly listed in China’s Criminal Law last year. Police have also frozen more than 1.7 million yuan (250,000 U.S. dollars) in assets and confiscated nine web servers, five computers and a Honda Accord. (Via China – People’s Daily Online.)

China Unicom Opens First 3G Mobile Phone Flagship Store In Beijing: Chinese telecom operator China Unicom has announced that its first flagship store under the company’s 3G brand ‘Wo’ has been opened in Beijing. Located in the southern hall of China Unicom’s headquarters building in Financial Street, the three-floor Wo flagship store covers a total area of about 800 square meters. (Via ChinaRetailNews.com.)

JAL to keep American Airlines link: Japanese media say Japan Airlines, which filed for bankruptcy last month, has decided to keep its current tie-up with American Airlines – the Oneworld Alliance. There had been widespread reports that it might defect to SkyTeam under Delta Air Lines. The carrier feared that the switch would confuse its passengers and that it could loose its antitrust immunity from US authorities because it would dominate the trans-Pacific market. (Via RTHK On Internet – Finance News.)

Godiva, Others Hope For More Chinese Chocolate Consumption: Perhaps looking to cash in on the propensity of more cosmopolitan, urban Chinese to give expensive or boutique chocolate as gifts (and, increasingly, to eat for themselves), Belgian chocolate giant Godiva has aggressively sought expansion in the Chinese market. Having entered Hong Kong in 1998, Godiva decided to test the waters in the mainland last September, opening a store in Shanghai’s Grand Gateway Mall. Apparently satisfied with that store’s popularity, the company has announced that it plans to open two new flagship stores in Shanghai’s swish Xintiandi area and at the Shanghai International Financial Center (IFC). (Via Jing Daily.)

Singaporean Tycoon Ng Teng Fong dies: SINGAPORE—Ng Teng Fong, one of Asia’s richest tycoons and the founder and chairman of Singapore’s largest unlisted property group, Far East Organization, died Tuesday aged 82, the developer said. Far East said in a statement that Mr. Ng had suffered a cerebral hemorrhage on Jan. 23. Forbes Asia magazine in 2009 listed Mr. Ng as the richest person in Singapore, with a net worth of more than US$8 billion. (Via WSJ.com: What’s News Asia.)

Singapore opens world’s first A380 MRO hangar: Singapore’s SIA Engineering on Wednesday opens the first Maintenance, Repair and Overhaul (MRO) hangar in the world to offer commercial maintenance services for the Airbus A380 aircraft here. At the opening of the A380 hangar, Singapore’s Minister in Prime Minister’s Office, Second Minister for Finance and Transport, Lim Hwee Hua said that as a gateway to Asia, Singapore is well- positioned to ride the wave of aviation expansion. (Via Business – People’s Daily Online.)

Wal-Mart Sells World Expo Products In Shanghai: As the cooperative partner of USA Pavilion at the 2010 Shanghai World Expo, Wal-Mart has started to sell World Expo related licensed products in its Nanpu Bridge store in Shanghai. To promote the Shanghai World Expo and to meet consumers’ demands for World Expo licensed products, the American retail giant Wal-Mart was formally selected as the franchised retailer of World Expo licensed products in January 2010. (Via ChinaRetailNews.com.)

Japanese men miss out on Valentine’s chocolate as women treat themselves: Japan’s unique Valentine’s Day tradition of women giving chocolate to men is melting away as more women show a preference for pampering each other instead of their boyfriends and spouses. The practice of giving tomo choco (friendship chocolate) has been highlighted as a new trend in a recent survey that found 74 percent of women plan to give a Valentine’s gift to a female friend but only 32 percent intended to buy something for a boyfriend. The popularity of tomo choco has been attributed to the way that the custom offers women an excuse to have a girls’ night out – something pertinent at a time when so much social interaction is going digital. (Japan Times) (Via News On Japan.)

Nathan Road, Hong Kong (photo: Randal Rayborn)

HK retail sales value grows 16%: The city’s total retail sales value for December has been provisionally estimated to be 29.4 billion HK dollars, up 16 percent on the same month last year, the Census and Statistics Department of Hong Kong said Monday. After netting out the effect of price changes over the same period, the volume of total retail sales grew 11.3 percent. The sales volume of jewelry, watches and clocks, and valuable gifts increased the most, by 30.4 percent, followed by motor vehicles and parts at 29.8 percent. (Via Business – People’s Daily Online.)

Kodak Enhances Its Manufacturing Facilities In China: Kodak is opening a second production line for its Xiamen printing plate manufacturing facility to enhance the company’s manufacturing capacity for offset products. The manufacturing line in the southern Chinese city will produce CTP plates for sale in Asia and support the development of current and new products. (Via China Sourcing News.)

HSBC Report: Men Key To Luxury Spending In China Today; Women Tomorrow: In the new book ‘Luxury China: Market Opportunities and Potential’ (Jing Daily review), Chevalier and Lu note that the Chinese luxury business is still very much dominated by middle-aged men, most of whom splash out on high-priced luxury goods with the intention of giving them as gifts. However, as the authors point out, over time we can expect to see a gradual shift in power from male to female consumers. (Via Jing Daily.)

Parcel south of Bund sets realty records: A 57,000-square-meter plot sitting south of the historic stretch of the Bund finally fetched 9.22 billion yuan (US$1.35 billion) yesterday and became the most expensive parcel in Shanghai by both total and average price. Privately owned Shanghai Zendai Property Ltd emerged as the winner of the plot after beating three domestic rivals. The plot, with a starting price of 9 billion yuan, was sold for an average price of 34,148 yuan per square meter, also the highest on the Chinese mainland so far. An entity consisting of China Enterprise, China Pacific Life Insurance and Taikang Life Insurance; Shanghai New Huangpu (Group) Co Ltd; and another entity led by Shanghai Forte Land and Shanghai Fosun were the three other participants in yesterday’s competition. The site is in an area of the Bund that the city wants to turn into a center dominated by financial institutions – part of a city master plan to turn Shanghai into a global financial center by 2020.(Via Shanghai Daily: Business.)

Asia-Pacific biggest air travel market: The Asia-Pacific region has overtaken North America as the world’s largest air travel market. The International Air Transport Association said 647 million passengers flew in the region last year, compared with 638 million in North America. Within Asia, China has eclipsed Japan over the past decade as the largest domestic market. And IATA says the Asia-Pacific market will continue to grow rapidly. (Via RTHK On Internet – Finance News.)