BEIJING - Multinational conglomerate General Electric (GE) said on Tuesday it will invest more than $2 billion through 2012 in China to set up joint ventures with Chinese companies and expand its innovative capacity in the country.
More than $1.5 billion will be used to fund technology and financial services joint ventures with Chinese State-owned enterprises (SOEs), GE Chairman and Chief Executive Officer Jeff Immelt said. The rest of the investment will be used to enhance research and development (R&D) capabilities and establish customer-oriented innovation centers, which is expected to create 1,000 new jobs.
"China is the world's fastest-growing market for aviation, energy, transportation, healthcare and financial services," Immelt said. He said the country is also one of the fastest-growing markets for GE and the company has a long-term commitment to the nation.
Under the $1.5-billion joint venture umbrella, the US-based company signed energy and railway agreements with four SOEs.
A 50-50 venture with Wuhan NARI Co Ltd, owned by the State Grid Corporation of China, will manufacture and market grid monitoring and diagnostics products.
Similarly, GE will carry out a joint acquisition with Shanghai Electric Power Co, also owned by State Grid, for a controlling stake in Shanghai Tianling Switchgear Co, a green power distribution equipment maker.
The company signed a framework agreement to form a 50-50 venture with the CSR (China South Locomotive and Rolling Stock Corporation) Chengdu Locomotive & Rolling Stock Works to develop propulsion system sets, sub-assemblies and parts for diesel locomotives. It also plans to enter a 50-50 joint venture with Beijing National Railway Research and Design Institute of Signal and Communication to supply railway and urban transit signaling systems.
These deals follow the company's partnership with Harbin Power Equipment Company for wind turbine production and marketing, and a diesel engine joint venture with CSR.
Immelt did not reveal the details of the financial joint ventures. "The joint ventures are in line with our strategy to build partnerships in China to support our business here and globally," he said. "And our customer innovation centers will add more than 1,000 new R&D, marketing and application engineers to work more closely with customers and partners to advance development and delivery of GE products and technology."
GE will set up the centers in six Chinese cities to conduct R&D with clients. The first batch of candidate cities are Shenyang, Chengdu and Xi'an - all traditional industrial bases in China - and construction is expected to begin next year.
The facilities will better service the western, northern, central and southern areas of the country as well as combine current R&D facilities in Shanghai, Beijing and Wuxi to cover areas including rural healthcare, renewable and clean energy, smart grids, energy-efficient lighting, rail and aviation.