General Electric signs mainland rail-transport deals worth US$1.4b
The Ministry of Railways has signed a letter of intent worth US$1.4 billion with United States conglomerate General Electric for rail and other transport projects, one of several trade agreements made during President Hu Jintao's state visit to the US.
The deal, announced yesterday, was the biggest of five initiatives this week by GE and its mainland partners totalling more than US$2 billion. They covered joint ventures, alliances and orders in key sectors such as rail transport, aviation and clean energy.
'These multi-sector, infrastructure-improvement deals will help strengthen the critically important US-China bilateral economic relationship, expand commerce and increase employment in both the US and China,' GE vice-chairman John Rice said.
The letter of intent between the ministry and GE Transportation reaffirmed the framework agreement on high-speed rail and urban-transit-vehicles development that the two parties announced last month.
GE Transportation's export of locomotives, locomotive sub-assembly kits and railway-signalling systems for the mainland's railway-upgrade programme is expected to maintain or create about 2,000 high-technology manufacturing jobs in the US.
GE also reaffirmed a commitment to invest US$50 million in a joint venture with the mainland's CSR Corp, the world's largest manufacturer of electric locomotives, to pursue high-speed rail projects in the US.
Zhao Xiaogang, the chairman of CSR, said the company had 'strong experience and advanced skills in the design, manufacture, testing, repair and maintenance of high-speed and medium-speed EMUs (electric multiple units) and urban-rail transit vehicles'.
Listed in Hong Kong and Shanghai, CSR was founded in December 2007 and is controlled by the state-owned China South Locomotive Group.
The GE Transportation-CSR joint venture marks the first US manufacturer ready to supply high-speed passenger trains for the two proposed high-speed railway corridors in Florida and California.
'This mutually beneficial partnership enables us to advance rail-infrastructure growth in both the United States and China,' said Lorenzo Simonelli, the president and chief executive of GE Transportation.
The other recently secured GE projects on the mainland include:
A joint venture between Aviation Industry of China and GE Aviation to develop and market a new generation of avionics systems to support the mainland's development of its first big passenger jet. This is expected to generate US$300 million in exports from the US and support the creation of at least 300 high-technology jobs in both countries.
A joint venture between Shenhua Group and GE Energy to develop coal gasification technologies on the mainland for commercial-scale deployment of cleaner coal. This is expected to generate more than US$150 million in revenue over five years and about US$100 million worth of US exports.
A collaborative agreement between China Huadian Corp and GE Energy to develop so-called distributed-energy projects involving combined heat and power, which are expected to become the most efficient natural gas solutions for the mainland.
GE and CSR Corp will co-operate on high-speed railways
The amount General Electric is investing in the joint venture, in US$: $50m