Boeing might profit as U.S and China Agree to Recognize Other’s Safety...

Boeing might profit as U.S and China Agree to Recognize Other’s Safety Approval

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The authorities from both U.S and China have agreed to recognize each other’s aircraft safety approvals. This move will particularly favor the rising aircraft industry in China, thus making it very easy for companies like such as Boeing Co. to sell their products in China.

The bilateral agreement was announced on Friday, as President Trump is set to visit China. He is set to travel to the world’s second-largest economy on Nov 8 on a three-day trade mission with representatives from 40 companies to follow him on the trip.

Both nations will make automatic moves towards approving of aircraft designs, manufacturing, and equipment, according to the press release by the Federal Aviation Administration. The U.S already has this type of agreement with Canada and Europe, as they have a more mature aviation industries.

The aviation agreement has been something talked about between the two nations as far back as 2005. China has constantly consulted with the FAA and adopted most of the aviation regulated of the U.S. Under this agreement, the aviation bodies of the two countries, the FAA and the Civil Aviation Administration of China will officially recognize each other’s regulatory systems for aircraft and parts.

The agreement is seen as more of a symbol of the collaboration on aviation matters has already been going on for years. According to Richard Aboulafia, an industry analyst with the Teal Group Corp., this deal is a good way for U.S companies to have a strong impact in what is the world’s largest aircraft market.

He stated that “This is diplomatically important. It shows that the U.S. takes China’s aviation industry seriously and that it regards their civil aviation officials as reliable partners.” Back in the early 2000s, China was not recognized as a serious buyer of airliners but in less than 15 years, they have now become the largest in the world, Aboulafia added. The country had a rough patch last year but analysts expect that it will remain the largest aircraft market in the world for decades to come.

The agreement will also be beneficial to China as it will see their first Chinese aircraft designed approved quickly by international bodies, thus making it possible to compete against single-aisle planes usually manufactured by Boeing and Airbus SE.

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Brayden Fortin is a American with numerous years of investment experience in the American Equity Market and in the Global Commodity Market. He has a B.Com degree from a well respected Canadian university and has experience working in the wealth management industry. He is interested in delving into numbers to analyze companies and markets. He won a couple of international strategy simulation competitions involving decision making through numerical analysis, and also scored in the top 50 on the Bloomberg Aptitude Test (out of nearly 200,000 test takers).

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