GE to sign numerous deals with China

GE to sign slew of China deals

By Ed Crooks in New York

Published: January 18 2011 21:38 | Last updated: January 18 2011 21:38

General Electric, the largest US industrial group, is signing a series of deals with China this week in energy, rail and aviation as it drives to improve its disappointing performance in the Chinese market.

GE says the announcements reflect the promise by Jeff Immelt, chief executive, that its collaborations with Chinese companies would create global sales and safeguard US jobs.

The latest deals, announced as Hu Jintao, China’s president, visits the US this week, could be worth $4bn-plus in sales and are expected to “support and create” about 4,700 US jobs.

The Financial Times reported last year that Mr Immelt had been one of the western chief executives to raise concerns about doing business in China, warning at a dinner in Rome last summer: “I really worry about China . . . I am not sure that in the end they want any of us to win or any of us to be successful.”

He also stressed the importance of the Chinese market to GE, and announced in November that the US group was investing $2bn in the country by 2012, including $500m on six innovation centres.

GE on Monday revealed two collaborations in energy, for combined heat and power gas turbines and coal gasification plants, with expected revenues of $650m over the next five years or so. The coal gasification deal is a joint venture with Shenhua Energy, the world’s largest coal company.

GE is on Wednesday expected to sign two rail deals: an order for freight locomotive kits worth $1.4bn, of which $350m will be exports from the US, and confirmation of a venture with CSR of China to develop high-speed rail systems for the US market.

On Friday, GE plans a formal signing to confirm the joint venture with Avic of China to supply avionics for the new Chinese C919 airliner, a contract worth up to $2bn.

Two of the deals – the coal gasification and avionics ventures – involve new 50:50 collaborations that will bring GE’s more sophisticated technology to the Chinese market: a move that raises concerns about the defence of intellectual property.

GE listed extensive safeguards for its IP in both cases. Keith White, who runs its gasification business, argued that a collaboration with a state group such as Shenhua gave better guarantees that IP would be protected.

In high-speed rail, the joint venture will be more concerned with trying to bring Chinese expertise to the US market.

Although GE’s Chinese sales have been growing at about 20 per cent a year, it has fallen short of its goal of increasing annual revenues from $4.7bn in 2008 to $10bn by 2010.

Copyright The Financial Times Limited 2011. You may share using our article tools. Please don’t cut articles from and redistribute by email or post to the web.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: