The $2 billion GE is investing in China through 2012 is focused on research and development, technology and financial services. The company will invest $1.5 million to fund joint ventures with state-owned companies in high-tech and $500 million on innovation centers in China. This has lead GE to land 4 joint-venture deals in energy and rail. 6 cities in China will receive innovation centers that will focus on product development, engineering and support in health care, clean-tech, smart grid, lighting, rail, and aviation. As for the joint ventures, GE forged deals with a series of state owned companies focused on grid monitoring, green power equipment, diesel locomotives and urban transit.
China is one of the fastest-growing economies in the world, predicted by some to grow to $123 trillion USD by 2040. Many Chinese are enjoying middle class lifestyles for the first time, and millions more are expected to do so in the near future. Consequently, China will be consuming far more electricity than ever before -a golden opportunity for GE to make back its investment, and then some.
Three-quarters of GE’s most recent investment in China involve partnerships with various state-owned enterprises, while the other quarter of this investment is dedicated to product research and development. These partnerships are ostensibly done to help Chinese companies, while the research and development helps the company more directly. However, it also appears that GE is targeting a market which they think will be profitable for them over the next decade; according to CEO Jeffrey Immel, China is GE’s fastest-growing market, and its growth will continue to be robust over the next decade.
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