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Trade war clouds horizon for China airshow

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SHANGHAI/BEIJING Trade frictions with the United States and accusations of industrial espionage are set to cast a cloud over China's largest aerospace meeting this week, as suppliers consider what the country's slowing economy could mean for booming jet demand.

The biennial Airshow China, to be held in the coastal city of Zhuhai tomorrow to Sunday, is traditionally an event for Beijing to parade its growing aviation prowess in front of aerospace executives, diplomats and arms buyers from over 40 countries.

But analysts say they are not expecting many big announcements or deals this year as a bruising trade war between Beijing and Washington and a slowing Chinese economy cause companies to be cautious.

While the tarmac will be filled with planes from Airbus SA and Embraer, the symbol of China's own commercial aviation ambitions, the Commercial Aircraft Corp of China's C919 narrowbody jet, will not be there.

A senior executive said it was undergoing test flights.

Boeing, which is opening a 737 completion plant in China, will not display any of its planes but only models.

"We're not expecting a big turnout this year," said Chinese aviation expert Li Xiaojin.

"As you know the Chinese economy is not doing great this year, so companies that would normally send 10 people will only send five instead."

While US-made aircraft have so far escaped Beijing's tariffs, analysts said they were still waiting to see what the trade war would spell for US companies such as Boeing, Honeywell and Gulfstream, who face fierce competition in China from Airbus and other suppliers.

The US exported US$16.3 billion (S$22.4 billion) of civilian aircraft to China last year, the biggest category of goods to China, according to a paper by the Federal Reserve Bank of St. Louis.

"It is not unlikely that China might strategically steer future aircraft purchases to Airbus rather than Boeing," said a China aviation expert at the University of Oxford. - REUTERS