If you visited the General Electric website in August, what you
would see on the homepage was not the regular fare of conches,
apples, turbines or windmills, but a countdown to the Beijing page,
with images of Beijing and the coming Olympic Games.
A very rare move for the US industrial giant, it highlighted
GE's commitment to the Chinese market and the expectations from
it.
Steve Bertamini, chairman and CEO of GE Northeast Asia and
president of GE Capital Asia, said the change in attitude started
about five years ago, when the company began to see China more than
as a market for exports and a cheap manufacturing base. GE has
since focused on creating a China-oriented business.
"We are still at an early stage of that process, but
fast-forwarding five years from now, it will really help transform
our business here to make sure we continue to grow at a healthy
speed for many years to come," Bertamini told China
Daily.
Global markets have become increasingly important for the US
giant, which generated half of its revenue from non-US markets.
Half of its staff members are non-American.
Last year GE China's revenue grew by almost 30 percent
year-on-year to $5.4 billion. In the first half of this year,
because of the large revenue base in 2006 and the spin-off of GE
Plastics from the conglomerate, the growth rate was slower at about
12 percent.
However, Bertamini expects the full-year growth to be between 15
and 20 percent, without taking the new spin-off into account.
Bertamini is even more optimistic on long-term growth. "In five
to 10 years, China can become one of the largest markets for GE,
possibly the second or third after the US."
GE's infrastructure, industrial solutions and healthcare units
all show good growth momentum. But GE Commercial Finance, its
consumer finance unit GE Money, and the media arm NBC Universal
still lag behind, except for a high-profile investment in Shenzhen
Development Bank.
With the continuous opening of the country, the company can
bring over more services from the other three business groups and
tap the potential of new trends in the fourth largest economy in
the world.
A key to GE's success in China is aligning its development with
that of the nation. One of the first things Bertamini did on coming
to China was to read the 11th Five-Year Plan for 2006-10 to
understand national priorities and goals.
He believes the biggest trend in China is people shifting from
villages to cities. According to the National Bureau of Statistics,
by the end of 2006, 577 million Chinese lived in cities and towns
while the country's urbanization rate stood at 43.9 percent, 4.8
percentage points higher than in 2002.
It is estimated that about 12 million people will move from
villages to cities and towns every year by 2050.
Urbanization means more demand for water, houses, power,
transport, and healthcare, areas where GE has a presence.
Another trend that GE has read from China's development
blueprint is its emphasis on sustainability. In 2005, GE launched
an Ecomagination initiative, trying to increase investments in and
sales from environmentally friendly products. The move came
accidentally around the same time China was drafting the 11th
Five-Year Plan.
Last year, GE Chairman and CEO Jeff Immelt came to Beijing and
launched the campaign in China. The company announced it would
spend $50 million on research and development of green technologies
in the country in five years.
Bertamini said one especially relevant research area for China
is clean coal technology, which is under development in GE's
Shanghai research lab with 15 top scientists in the field.
He expressed hope that the government will promote big
State-owned coal companies to apply the GE technology.
In September, Immelt made his second trip to China this year and
witnessed a signing ceremony with Wuhan Iron and Steel (Group)
Corp.
GE's power generation solutions are expected to save 1.2 billion
yuan in electricity bills and reduce 2 million tons of CO2
emissions annually for the steelmaker.
(China Daily October 30, 2007)
