Chongqing Machinery & Electric, the listed unit of western China's largest industrial conglomerate, is in advanced talks to sell an unknown stake in its bus gearbox plant to an overseas firm in exchange for the latter's technology, according to its chief. The company was also in early talks to buy all of an unlisted British firm with advanced technology in industrial machinery manufacturing, chairman Xie Huajun said. Like many mainland industrial firms, Chongqing Machinery was eager to acquire foreign technology to raise its competitiveness amid tougher export market conditions and an economic slump, Xie said. For some foreign firms, sluggish domestic markets had forced them to consider partnering Chinese firms to tap the vast growth potential and low labour costs on the mainland. 'We are in the due diligence stage in the bus gearbox deal ... we want to expand our product range to cover segments like trucks, after getting access to the would-be partner's technology,' Xie said. Chongqing Machinery, a subsidiary of local government-owned Chongqing Machinery and Electronic Holding (Group), had a 43 per cent share in the intercity bus gearbox market, with sales of 60,000 units last year, he added. Xie said Chongqing Machinery is also conducting due diligence on its potential British acquisition target. 'If progress is smooth, we can begin formal talks within this year,' he said. Chongqing Machinery last week posted a 21.4 per cent year-on-year decline in net profit to 215.42 million yuan (HK$244.52 million) for the year's first-half. Sales tumbled 11 per cent to 2.8 billion yuan amid the economic slowdown.