Nov. 9 (Bloomberg) -- General Electric Co. plans to invest more than $2 billion in China in technology and financial service ventures and research, adding 1,000 jobs in a country Chief Executive Officer Jeffrey Immelt is targeting for growth.
GE intends to invest more than $1.5 billion in joint ventures with Chinese state-owned companies in “key high-technology sectors,” it said in a statement today. The Fairfield, Connecticut-based company will spend $500 million on product development and customer innovation centers through 2012, where the jobs will be added.
Immelt yesterday appointed Vice Chairman John Rice to accelerate a push to bolster exports and expand partnerships in countries building infrastructure to support economic growth, such as China and India. GE expects to have $20 billion in discretionary cash by year-end partly for investment to boost sales, which missed analyst estimates in the third quarter.
“China and India will lead future growth in energy demand,” Zhang Shun, a Beijing-based analyst with Ping An Securities Co., said by phone today. “They will need more roads, more power plants and more railways to meet the needs of their soaring economies, generating opportunities for equipment manufacturers and technology providers like GE.”
The company will establish six new innovation centers and named Chengdu, Shenyang and Xi’an as potential candidate locations. GE’s statement didn’t provide details of the financial and technology ventures it’s planning.
“The growth in the next decade or decades that’s going to take place will be quite robust in places like China and India,” Immelt said today in Beijing.
GE also announced four joint ventures in energy and transport. It will start a venture with Wuhan NARI Co., owned by China’s State Grid, to build electric transmission monitoring and diagnostic equipment.
The company will make a joint acquisition with Shanghai Electric Power Co., also owned by State Grid, for a controlling stake in power-distribution parts maker Shanghai Tianling Switchgear Co.
In rail, GE plans an agreement with Chengdu Locomotive & Rolling Stock Works, a company owned by China South Locomotive and Rolling Stock Corp., to form a 50-50 venture.
The company is planning to start a 50-50 joint venture with the Beijing National Railway Research & Design Institute of Signal & Communication to supply signaling systems.
Immelt was in China days after traveling to India where he met President Barack Obama, who was visiting the country to drum up business for U.S. companies.
GE expects energy and health care to drive revenue in India to a $10 billion goal in five years, Immelt said in interview in Mumbai on Nov. 6. GE will seek to acquire companies worth about $50 million, Immelt said.
GE got about $33 billion of its $157 billion in revenue last year from emerging markets, with about $6 billion from China. Sales in China should rise by at least 10 percent this year, Immelt reiterated in July.
China and industrialized regions including Europe are pulling ahead of the U.S. in the race to develop clean energy, because policy makers in Washington have been caught up in debates on issues such as the effects of climate change, Immelt said in September.
China may spend about 5 trillion yuan ($750 billion) in the next decade developing cleaner sources of energy, the government said in July. GE is investing $10 billion during the next five years in so-called clean-energy products and services.
GE in 2003 opened a research center in Shanghai, the third of what is now four globally. Immelt has pledged to increase research and development in part to tap markets like China, and use their engineering expertise.
GE shares fell 0.1 percent yesterday to $16.71 in New York. They declined 5 percent on Oct. 15, the most since May, after the company said third-quarter sales fell 5 percent to $35.9 billion, missing analyst estimates. Profit fell 18 percent to $2.06 billion.