GE Invests $2B In China

General Electric plans to sink more than $2 billion into China through 2012 and add more than 1,000 jobs as part of the conglomerate’s efforts to build partnerships in the Far East.

GE says it will likely spend $500 million on research and development and new customer innovation centers, all of which will generate jobs.

More than $1.5 billion is expected to be put toward new joint ventures with Chinese state-owned enterprises in high-technology sectors, according to the Associated Press.

What’s In It For America?

WMB sees numerous benefits in terms of improving our global stance in relation to China, a nation whose trade and economic policies have a great influence on U.S. companies, among them rebounding automakers General Motors and Ford.

GE, which began business in China in 1906, wants to keep pace with the country’s fast growth, perhaps the greatest of any nation on the planet right now.

Chairman and CEO Jeff Immelt, who recently traveled to India with President Obama seeking work for U.S. businesses, says China is the world's fastest-growing market for aviation, energy, transportation, health care and financial services.

GE, based in Fairfield, CT, has 36 wholly-owned entities and joint ventures in China in manufacturing, service and R&D. It has 14,000 workers in China.

GE says the new customer innovation centers, which will be built in six cities, will be used to better serve the west, north, central and south China markets.

Among the cities under consideration for centers include Chengdu, Shenyang and Xian. The new facilities will work closely with existing R&D operations in Shanghai, Beijing and Wuxi.

The centers will concentrate on product development, engineering for applications, sourcing support and delivery in development areas such as rural health care, renewable and clean energy, smart grid, energy-efficient lighting, rail and aviation.

“These commitments represent GE's confidence in China's long-term economic prospects,” says Mark Norbom, president and CEO of GE Greater China.

GE, which operates in more than 100 countries and has 300,000 employees globally, will team with a group of Chinese businesses to accomplish the company’s investment objectives.

GE's Efforts Make Sense

We, at WMB, applaud GE’s forward-thinking approach to expanding its global reach through mutually beneficial partnerships with China, the world’s most populous nation, which also hosts the dynamic economic center of Hong Kong, a special administrative region.

From a political standpoint, the planet benefits from a tighter the bond between global capitalist enterprises and the world’s largest communist system.

The more exposed China’s leaders are to outside influences, the greater the chance for openness and changes to emerge as younger generations rise to prominence within the national party.

New, progressive thinking and cultural exchanges blossom naturally when working relationships are developed between economic rivals and military adversaries.

From an economic standpoint, the United States stands to gain a more equal partnership in terms of trade with another economic giant. WMB firmly believes China and America need each other to prosper, despite differences in political and social systems.

Sure, there are big issues that divide China and the United States, most notably in human rights, but we have to recognize and appreciate the fact that our two nations, arguably, are the two most dominant players on the world stage right now.

China and America have the financial, political and environmental power to shape the planet’s future. As WMB sees it, a partnership based on these three areas works in both countries’ interests.

Solutions to national and world problems need not be complicated. Since the most direct path between two objects is a straight line, expanding business partnerships between China and America just makes good sense.

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