Flag carrier Air China said on Friday it had agreed to buy 20 of Boeing's 737-800 planes as it expands to meet growing demand.

In a statement to the Hong Kong stock exchange, Air China said the list price for the short-to-medium range planes amounted to 1.4 billion US dollars but it had been granted "significant price concessions".

The planes are for delivery between 2013 and 2015.

"The transaction will strengthen the fleet capacity of the company with an increase of approximately five percent," Air China said in a statement.

"The transaction will reinforce the company's market share in the domestic market, and will also increase frequency of flights for a number of domestic and neighbouring international routes."

The announcement came despite concerns earlier this year that Boeing might be affected by Chinese sanctions on US companies involved in arms sales to Taiwan -- sales that prompted Beijing's fury.

Boeing opened an aircraft maintenance hanger at Shanghai's Pudong Airport last October, expanding a joint venture in China.

Also last October Boeing predicted China's aviation market would produce orders for 3,710 new commercial aircraft over the next 20 years.