The Vice Chairman of General Electric, John Rice, said yesterday that the company is expecting to "significantly improve relations and partnerships" with Chinese infrastructure firms which are active along the modern day 'Silk Road' corridor that will link three continents together.
SEOUL, South Korea - Oct. 25, 2016 - PRLog -- GE is hoping new partnerships will boost third-party sales of their products in more than 60 countries that the new trade route will pass through, as it winds its way from China and Pakistan, through the Middle East and into Europe.
"The idea will be to get a lot closer to Chinese construction and engineering companies so GE can be active in project procurement and massively boost sales over all three regions," said Charles Sutton, Director of Investment Management Division at CTI China Renaissance, in an email to investors. "In theory, GE could multiply their annual Chinese third-party sales 10-fold over the next few years."
The 'One Belt, One Road' initiative has been championed for years by China's President Xi Jinping, and many Western players in the construction and logistics sector have targeted the project as a huge opportunity to get involved in what could turn into a long-term source of revenue. Companies like Caterpillar and DHL Group will compete with GE for contracts with Chinese partners.
DHL are already involved in rail services between China and Europe, and Caterpillar have said they would be interested in assisting with the construction of network links, a central part of the initiative.
GE would be the favourite to move in on the project. The sprawling U.S. conglomerate already has dozens of joint ventures in place within China, employing over 20,000 people. There has been increasing pressure from activist investors to look at ways to boost third-party sales as domestic trade has been particularly slow due to a dip in the U.S. economy and new regulatory rules.
"The facilities we have set up in China will be a good source of financing if we need it. We acknowledge that these kinds of infrastructure projects can take a bit longer to get going as the system is slightly more complex than it used to be," added Rice. "This doesn't concern us; our perspective is from a local procurement and manufacturing point of view. Nothing we see now would convince us to slow our growth into China; on the contrary, we are forging ahead and looking for new partnerships."
Contact
CTI China Renaissance
chung.yong-jin@ctimanagement.com
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GE looks to increased Chinese relations for trade boost
October 25, 2016 at 11:30 AM EDT
