January 21, 2011

General Electric To Enter Into FIVE New Cooperation Agreements With Chinese Partners! Coincidence? I Think NOT!

Trading Markets
written by Staff
Thursday January 20, 2011

Diversified infrastructure, finance and media company General Electric Company (NYSE:GE) announced on Wednesday that it plans to sign five agreements with Chinese partners this week, totalling over USD2.0bn in revenues for the company.

The five joint ventures, partnerships and orders are in strategic sectors such as clean energy, aviation and rail transportation. These are expected to generate over USD1.0bn in exports from the US and create or support jobs in both countries, including over 4,500 US jobs.

The deals include a joint venture between GE Energy and Shenhua Group Corporation, signed on Tuesday, to develop coal gasification technologies in China, key to commercial-scale deployment of cleaner coal solutions. This collaboration is expected to generate over USD150m revenues over five years and USD100m of US exports in services, R&D and licensing. It will also support job creation in the US and China.

Also, a collaborative agreement between GE Energy and China Huadian Corporation will be signed to develop distributed energy combined heat and power (DECHP) projects. GE forecasts at least 50 gas-turbine generator sets being sold and installed in China in the next five years, resulting in USD500m of revenues for the partnership and USD350m in US gas turbine exports from Cincinnati, Houston, Colorado and Oregon. In addition, this deal will support over 2,100 jobs throughout GE's domestic US supply chain.

The third deal is a joint venture between GE Aviation and Aviation Industry Corporation of China (AVIC) to develop and market the new generation of avionics systems with an immediate priority on supporting development of China's first home-grown big passenger jet. This joint venture is expected to result in USD300m in exports from Michigan, Florida and Ohio and support at least 300 high-tech jobs in each of the US States and China.

In addition, a Letter of Intent has been signed by GE Transportation with the Ministry of Railways (MOR) to provide USD350m worth of US-built locomotives, locomotive sub-assembly kits, service support and signalling systems for China's railway upgrade. The export order is expected to support 2,000 US jobs.

Finally, a Letter of Intent has been signed by GE Transportation with the MOR to reaffirm both parties' intent to collaborate on High-Speed Rail (HSR) and electric rail opportunities in North America. The partnership represents a joint investment of approximately USD50m with the potential to support 250 US jobs by 2012 for the first phase of the agreement.

GE said that these agreements build on a larger-scale commitment it has already made in November 20101 when it announced plans to invest over USD2.0bn in China through 2012 to expand the company's R&D and innovation capabilities and create new local partnerships.

In additionally, GE has been selected as one of 10 founding US companies to participate in a new US.-China public-private partnership on healthcare.

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