General Electric has set up a 50-50 gasification joint venture with Shenhua Group, the country's largest coal producer, as the US conglomerate further consolidates its foothold in China.
The signing of the joint venture - which will specialise in a technology that converts coal into a synthesis gas - came just three days after GE announced it is buying a 15 per cent stake in China XD Electric Group for 3.38 billion yuan (HK$4.2 billion).
Synthesis gas is a mixture of gases made as feedstock and produced by controlled combustion of coal in the presence of water vapour.
The tie-up with Shenhua would help GE secure more large clean-energy projects, said Paul Browning, chief executive of GE's thermal products businesses.
Neither party would disclose how much they will invest in the venture, which will sell gasification technology licences across China.
The synthesis gas produced can be used to make chemicals or other products. Gasification technology is also an important tool needed in the process of coal-to-liquid fuel conversion.