China buys 88 Airbus A320s

China placed an order for 88 Airbus A320 planes on Tuesday, putting a bubbling trade row with Europe over a proposed emissions scheme aside as it tries to fuel economic growth.

Airbus said on Tuesday it had signed the deal with China Aviation Supplies and Industrial Commerce Bank of China.

The deal, worth $7.5 billion at list prices and with deliveries slated for 2012-15, was signed by Airbus president Tom Enders and CAS President Li Hai during a visit to Germany by Chinese Premier Wen Jiabao.

The visit came days after industry sources said China had delayed the high-profile announcement of a $3.8 billion order for 10 Airbus A380 superjumbo jets at the Paris Air Show to protest over European Union emissions trading rules.

Under plans to include international aviation in its carbon market from next year, the EU would require all airlines flying to Europe to buy permits for each tonne of carbon dioxide they emit above a certain cap.

While China continues to put the brakes on lucrative orders of European widebody aircraft, industry analysts said it seemed as though China was pulling back from a full-blown trade spat to protect economic growth.

Although it plans to start competing with Airbus and Boeing by building its own narrowbody passenger jets from the second half of this decade, China is still ordering large volumes of Airbus A320s and Boeing 737s to feed huge traffic growth.

Ordering A320s is also in the country's interest as Airbus began assembling planes for the Chinese market at a factory in Tianjin, outside Beijing, in 2009.

While China typically schedules aircraft orders to coincide with political visits, the deals can be difficult to analyse.

In November 2010, China and France announced 102 Airbus orders during a visit to Paris by President Hu Jintao, but the manufacturer said only 66 involved new contracts.

In January, China announced final approval for 200 Boeing aircraft worth $19 billion in a boost for President Barack Obama as Hu visited the United States. Again, analysts said the deals had been in the works and accounted for by investors for some time.

Tuesday's orders were all new and firm, Airbus said.

The Chinese premier told a joint news conference with German Chancellor Angela Merkel that firms from the two countries had signed contracts worth $15 billion in all.

China is Germany's fifth-biggest export market and the biggest importer of goods into Germany, with bilateral trade volume last year reaching 130 billion euros ($184 billion), up more than 34 per cent.

Other business deals announced during the visit included investment by carmakers Volkswagen and Daimler and chemicals group BASF in China.

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