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China, France sign new plane deal

PARIS: State-owned French planemakers Aerospatiale AERP.CN signed a letter of intent with Aviation Industries of China on Thursday to help develop a 100-seater aircraft for the domestic Chinese market, officials said.

The accord, to be finalised in June according to French officials, was signed at a hastily-scheduled ceremony in the presence of President Jacques Chirac and visiting Chinese Premier Li Peng, who are due to hold talks later on Thursday. On Wednesday, China signed its biggest order so far with the European Airbus consortium to buy 30 short-haul A320 planes and confirmed the purchase of three long-haul A340s. Aerospatiale is the French partner in the consortium.

The latest signing demonstrated the determination of both sides to go ahead with business deals totalling 10 billion francs ($2 billion) despite a clash over human rights which delayed a state dinner by nearly two hours on Wednesday night.

French Prime Minister Alain Juppe agreed to scrap a planned exchange of dinner toasts after Li Peng objected to his intention to mention, albeit in general and mild terms, the issue of democracy and human rights.

Juppe's aides insisted he had not given in to Chinese pressure, but French newspapers charged the prime minister had backed down and allowed Li Peng, branded the "butcher of Tiananmen Square" by human rights groups over the military suppression of a democracy movement in 1989, to censor him.-Reuter