Bloomberg News

General Electric Will Open More Innovation Centers in China

May 30, 2012

Employees at the General Electric Co. healthcare unit's production facility assemble medical X-ray devices in Beijing. GE’s center in Chengdu will mainly focus on developing new health-care products aimed at solving rural medical needs, while the Xian center “focuses more on lighting and coal,”  Chief Executive Officer Jeff Immelt said. Photographer: Nelson Ching/Bloomberg

Employees at the General Electric Co. healthcare unit's production facility assemble medical X-ray devices in Beijing. GE’s center in Chengdu will mainly focus on developing new health-care products aimed at solving rural medical needs, while the Xian center “focuses more on lighting and coal,” Chief Executive Officer Jeff Immelt said. Photographer: Nelson Ching/Bloomberg

General Electric Co. (GE:US), with businesses ranging from energy to health care to aviation, plans to open its second China innovation center in Xi’An city to be closer to customers in faster-growing regions.

The company intends to set up more centers in China after opening the Xi’An facility in the central province of Shaanxi this summer, Chief Executive Officer Jeff Immelt said at a briefing today in Chengdu, western China. GE is working on two to three more joint ventures in the country, according to Immelt, who said it’s too early to provide details.

GE is carrying out projects as part of a $2 billion commitment made in late 2010 for innovation and technology partnerships over three years in China, where annual revenue gains of 20 percent contrast with negative growth for the company. Fairfield, Connecticut-based GE today opened an $80 million center in Chengdu for researching products in areas including health care, energy and transportation.

“We expect to see steady and consistent growth in China over a period of time,” Immelt said at the briefing to open the Chengdu center. “Our revenue growth in China is 20 percent a year, which is quite substantial.”

GE recorded revenue declines for the three years through 2011, according to data compiled by Bloomberg. Sales from the U.S., the largest revenue contributor, dropped 7.1 percent last year, the data show.

The company is focusing on international markets (GE:US) and plans to boost sales outside the U.S. to 65 percent of total industrial revenue by 2020 from 59 percent now, GE said in a presentation on its website March 7.

China Products

China, Australia and Peru are among the so-called growth markets that GE projects will account for half its industrial revenue by 2020, Vice Chairman John Rice said in March.

GE’s center in Chengdu will mainly focus on developing new health-care products aimed at solving rural medical needs, while the Xian center “focuses more on lighting and coal,” Immelt said today.

At the Chengdu center, hospital simulation areas have been set up where GE customers can try new products in recreated maternity wards or intensive care units, and then suggest modifications. GE researchers are working on medical devices better suited for rural markets, including a handheld ultrasound, and teleconference facilities allowing doctors in a city hospital to diagnose patients sitting in a county-level clinic.

China is trying to improve quality health-care for its poorest citizens, including setting up community level health clinics throughout its rural districts and training thousands of general practitioners to staff them.

To contact Bloomberg News staff for this story: Daryl Loo in Beijing at dloo7@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net


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