Thread by @MacroPoloChina

Over the 40 years of formal US-China relations, few companies better illuminate the complex layers of this bilateral relationship than @Boeing.

@Neilthomas123 traces the story of Boeing and China, from the Cold War to the Trade War. Follow this thread: macropolo.org/boeing-us-chin…

1/ Did you know the very first engineer @Boeing hired was Chinese?

In 1916, Chinese-born, MIT-trained Wong Tsu helped William Boeing build the Model-C.

macropolo.org/boeing-us-chin…

2/ Boeing's first sale to China came during the Cold War. When Nixon visited China in 1972, he personally approved a request from China to buy 10 B707s. The motive is more geopolitical than commercial: to weaken China's aviation dependence on Soviet planes:macropolo.org/boeing-us-chin…

3/ Things accelerated from there.

In 1978, @Boeing signed another $156 million contract with #China to deliver three B747s.

By 1980, Pan Am had started commercial flight service between the two countries - the first airline to do so since 1949: macropolo.org/boeing-us-chin…

4/ Boeing capitalized on America's cold war strategy & congenial US-China relations & China's untapped market. Air travel boomed, and Boeing sought to deepen its commercial ties with China.

But there was a new uncertainty after 1989: China's MFN renewal: macropolo.org/boeing-us-chin…

5/ In the 1980s, China was granted MFN status, which enabled it to get trade advantages from the US.

But there was a catch: the US president, then George HW Bush, had to renew MFN each year. And the renewal became increasingly contentious after 1989: macropolo.org/boeing-us-chin…

6/ The 1989 Tiananmen Square crackdown fundamentally changed US-China relations.

Appalled by China's human rights violations, those opposed to trade with China found the renewal of MFN to be a convenient bargaining chip to exert pressure: macropolo.org/boeing-us-chin…

7/ But even as human rights became more prominent, Bush renewed China's MFN every year & adopted a policy of engagement.

"No nation on Earth has discovered a way to import the world’s goods and services while stopping foreign ideas at the border,” Bush claimed in 1991.

8/ But soon after the Cold War ended, Bill Clinton rode to the presidency in part by criticizing Bush for "coddling dictators from Beijing to Baghdad."In 1993, Clinton issued an executive order stipulating China's MFN renewal would be contingent upon its progress on human rights.

9/ The move caused backlash from US businesses, with @Boeing leading the charge.

Boeing’s then VP for international development said that “We will lose orders and people will lose jobs,” if Clinton ended China’s MFN status: macropolo.org/boeing-us-chin…

10/ Under pressure, Clinton eventually renewed China's MFN status despite opposition from Congress.

In later years, with the US business community's support, the White House consistently defeated legislation to revoke MFN.

Pictured, a @washingtonpost headline in 1994👇

11/ But MFN renewal wasn't Boeing's first road block. It soon faced another challenge: @Airbus.

Airbus delivered its first jetliner to #China in 1985, and its sales had been on the rise since.

The Boeing-Airbus duopoly means China now has choices. And choice = leverage.

12/ How did Beijing wield this leverage? In 1996, Wu Yi, China’s minister of foreign trade and economic cooperation, cancelled a US visit because DC had sanctioned China for IP theft.

Wu was going to confirm $4 billion of aircraft purchases from @Boeing during that visit.

13/ Instead, the next month, China announced a $1.5 billion order for @Airbus.

A high-level Chinese official told a @Boeing executive -

“Because your government chooses to kick us and harass us, many business opportunities that should go to the US have gone elsewhere.”

14/ @Boeing needed a game changer amid fierce competition from @airbus & uncertain domestic politics.

That game changer was accepting China in the @WTO - which would enable China to enjoy unconditional MFN status, support its growth and in turn stimulate demand for air travel.

15/ The unconditional MFN status, referred to as PNTR, needed approval from Congress.

@Boeing mobilized its 10,000 suppliers in 420 House districts to help support China's @WTO bid. Many US companies joined in the campaign at the time: macropolo.org/boeing-us-chin…

16/ And it worked.

The PNTR bill was passed in the House in May 2000 and in the Senate by September. Clinton signed the bill into law on October 10, as pictured below, and China officially joined the @wto on December 11, 2001: macropolo.org/boeing-us-chin…

17/ Pictured: US Trade Representative Charlene Barshefsky (4th from left) exchanges signed agreements on China’s entry into the @WTO with China’s minister of foreign trade and economic cooperation, Shi Guangsheng, in 1999: macropolo.org/boeing-us-chin…

18/ In the ensuing years, China would not be satisfied with just trade. It also wanted technology transfers to realize its own commercial aviation ambitions.

Boeing and Airbus were cautious, providing limited support to China, which has become both a partner & a competitor.

19/ As early as the 1980s, Beijing wanted to build its own plane.

Pictured: a Chinese-made Yun-10 jet in Tibet in 1984, reverse-engineered from imported Boeings. It made its maiden flight in September 1980, but funding was cut in 1984: macropolo.org/boeing-us-chin…

20/ In 2006, China announced plans for its own commercial jetliner.

The C919, pictured below, is the latest example of this plan. Although China has thus far failed to break into the jetliner market, the C919 is the most serious threat to the Boeing-Airbus duopoly in decades.

21/ As cooperation turns into competition, fast forward to today, a new war is being fought - Trump's trade war.

Should the US-China trade war escalate, given the Boeing-Airbus duopoly, @Boeing is an obvious candidate for retaliation from Beijing: macropolo.org/boeing-us-chin…

22/ In avoiding being caught in the crossfires of the #tradewar, @Boeing is now working actively to exempt itself from tariffs and persuade both governments of trade’s mutual benefit.

23/ Boeing’s China operations have steered through many obstacles. Does its starring role in US-China relations offer lessons for how to approach the current bilateral impasse?

Dig deeper in @Neilthomas123's piece - and thanks for following along: macropolo.org/boeing-us-chin…