General Electric will set up more joint ventures in China as the company tries to localize production here and seek sourcing partners to offset rising costs of steel and copper, a senior company official said yesterday in Shanghai.

 

The move will help GE sustain growth in China - especially its infrastructure division that makes aircraft engines, locomotives, power generators and water treatment equipment - at a double-digit rate over the next few years.

 

The company's goal is to reach US$10 billion in sales in China by 2010.

 

"We are looking to localize more products and capacities, seek more creative partners here and prepare for more technology transfers at the right time," said John Rice, vice chairman of GE and chief executive officer of GE Infrastructure, its largest business segment, at a media round table.

 

The solution to rising costs also included optimized designs to achieve a "best cost" and GE has started to establish strategic sourcing partner relations on a long-term basis.

 

But there's no unified standards for partners to form JVs in China as it will vary from case to case, Rice added.

 

Currently GE, the world's biggest maker of power plant turbines and jet engines, has more than 50 companies in China. Of them, 23 are joint ventures but it is unknown whether GE has a majority stake in most of the JVs.

 

The search for local partners in China will also involve acquisitions as the company plans to make US$1 billion in deals during the next three to four years, according to a Bloomberg News report, citing Steve Bertamini, CEO of GE China.

 

GE CEO Jeff Immelt has set a target last year for US$10 billion in revenue from China and reiterated the goal this year even after GE sold its plastic division, which accounted for a substantial part of its sales in the country, to Saudi Basic Industries Corp this year.

 

(Shanghai Daily October 23, 2007)