GE strives to make its mark
General Electric is a household name in the United States. But despite spending millions of yuan expanding its China presence in a wide range of industrial sectors, it has yet to win the recognition it believes it deserves here. In an exclusive interview with China Daily's Shanghai reporter Wang Lan, GE's chairman and CEO for Northeast Asia and Greater China Steve Bertamini discussed the scope of the company's operations in China and its growth potential.
Q: What is GE's development strategy for the next few years?
A: Infrastructure (development) continues to be the largest business we do here.
It includes transportation, aircraft engines and power generation. Those items continue to grow in China, and that's our very large business interest.
Our medical business also provides very broad products.
We have seen a lot of growth in plastics. And our financial services will become a more active sector over time, and there are a lot of interesting opportunities for us.
Lastly, the industrial sector will also continue to be the growth sector.
Q: How do you view the prospect of developing your company's financial services business in China under the present regulatory environment?
A: Financial services ought to be one of the largest pieces in our future business. Last year, we made an investment jointly with a city in China to look at some leasing opportunities.
We think the market continues to gradually open up. We should see more opportunities arising over time.
Q: Which area of deregulation would you like to see most?
A: I would say the consumer financial services would be the area we could benefit the most from. And that includes, obviously, allowing foreign companies to open branches more quickly, allowing foreign companies to buy larger stakes in domestic financial companies.
Q: If you are going to choose a partner, what kind of partner would you likely look for?
A: We'd choose someone who has a distribution network, which we see as critical. As a foreign player, establishing a distribution network is very time-consuming. Distribution is critical to success; in any business to customer (B2C) business, distribution is always key.
Q: When you do consumer financial services, which area would you target first?
A: We worked with Wal-Mart and Shenzhen Development Bank and jointly launched a credit card in 2006.
We think credit cards in general would provide more opportunities. It is a very broad market.
Q: Would you consider incorporating a finance company in China?
A: Absolutely. I think there is a range of options. I think in China, it is really difficult today to determine which is the best strategy.
Either taking a minority stake in a large bank or taking a larger stake in a smaller bank or starting from scratch. We see most players have multiple strategies, because they are not quite sure which one is the best. If you can, you try to make progresses in multiple areas.
Q: Among your existing industries in China, which area is growing faster than others
A: For example, I hope for a lot of growth in the water business right now. Clearly, China is a water-scarce country. So, we think the water business will grow very quickly.
And there would be continuous and strong growth in aircraft engines. China will continue to purchase more and more airplanes. We would see a lot of growth in that area.
Q: GE has put a lot of emphasis on the environment. How is that helping your business in China now?
A: We have been working on a broad range of technologies to help China accelerate the development of environmental protection. We think it is very exciting.
(China Daily 03/13/2007 page15)
