Ge is under heavy pressure in China

2022-08-05
  • Detail

General Electric faces heavy pressure in China

Jeffrey Immelt, the global chairman and CEO of General Electric Co. (as of July 2017), made remarks about China last week, reflecting the pressure the company has encountered recently in doing business in China, and General Electric has always placed high hopes on China

according to those who heard the comment, Immelt said at a private party in Rome that it is becoming more and more difficult for foreign enterprises to do business in China

as GE Capital, the company's once popular profit engine, downsized, Immelt was under pressure to highlight the growth of its industrial sector, so that the backward share price rose. The current share price of Ge is $14.83 per share, down from $38.43 in april2008. GE has always placed high hopes on its growth in the Chinese market. At present, the company has 13000 employees in China

however, Ge is facing increased competition in China because the Chinese government is trying to promote local enterprises and more western competitors are looking for business in China. Globally, China's wind power enterprises are eroding GE's wind turbine market share, and GE's sales of avionics instruments in China have also declined

two years ago, Immelt said that GE hoped that its sales in China would reach US $10billion this year, and its total revenue in China in 2009 was about US $5.3 billion, up from US $4.7 billion in 2008. China is GE's fifth largest market in terms of sales

after Immelt's remarks surfaced in Rome on June 30, GE said that its policy in China had not changed and it still regarded China as an important and attractive market

a spokeswoman said on Thursday that GE has the honor to cooperate with major fields in China's fast-growing market, including aviation, health care, energy and railway equipment

some success has been achieved so far. In the healthcare industry, the sales of its imaging equipment in China are booming. Immelt once said that the sales revenue of healthcare in China this year may exceed 1billion US dollars. The company has also said that 1000 salespeople will be recruited for the imaging equipment department this year

but other aspects are not so ideal. For example, the wind turbine business that GE hopes for is in fierce competition with its Chinese competitors. Last year, the Danish Research Institute BTM consult APS reported that GE has the second largest share in the global wind turbine market, but its share has dropped to 12.4% from 18.5% a year ago

Chinese wind turbine manufacturers such as Sinovel wind, Xinjiang Goldwind science technology and Dongfang Electric have been supported by China's state expenditure on wind energy, and they are growing rapidly, It has seized the market share from the world's leading companies such as Vestas wind systems a/s and general electric, and now ranks among the top ten wind turbine manufacturers in the world

Ge faces other challenges in China. In April, COMAC chose Hamilton Sundstrand, a subsidiary of United Technologies Corp., to provide it with a $1billion power generation and distribution system for a planned jet aircraft, instead of general electric and other bidders

in addition, in November last year, Ge disclosed that it would establish a joint venture with China Aviation Industry Corporation, the parent company of Commercial Aircraft Corporation of China, to jointly provide avionics systems for global jet aircraft manufacturers. At that time, Ge executives said they expected the joint venture to be established by the middle of this year

so far, this joint venture has not been established. Ge said that negotiations were under way and it did not consider it an extension. A spokesman for general aviation said they were working out all the details. Anne Eisele, another Ge spokesman, said that the joint venture may be established at any time and is expected to be put into operation before 2011

to complicate the alliance of General Electric, AVIC is also seeking to establish a similar joint venture with Honeywell International Inc., a phoenix based flight control system manufacturer, which may compete with the joint venture of General Electric. Honeywell also hopes to provide components for the C919 narrow body jet planned by COMAC. Ethel said that we are still optimistic about the avionics system of C919, but we can't predict the result. We are looking forward to its announcement

in other areas of GE's aviation business, it has achieved some success, such as winning the contract to produce engines for two Chinese aircraft

in the coal business of General Electric, in November last year, it reached an agreement with Shenhua Group Co., Ltd., a Chinese coal enterprise, to apply for the license of coal gasification technology in China for production and sales. At the time, GE said it expected the deal to be completed in the first half of 2010

however, a spokesman for GE power water, a subsidiary of Ge, said that the negotiations were still ongoing. GE has applied for licenses for 40 coal gas chemical plants in China. It still hopes to set up a joint venture to help it expand its business in China on a large scale

support,) Ge is making efforts to increase the advantages of Jiuli special materials in the field of advanced transmission and distribution systems (the so-called smart electricity) in the evening of November 16. Ge estimates that China's smart electricity market is expected to reach US $60billion in the next 10 years. Its biggest customer is China National Power Corporation, which covers the power distribution in most parts of China. GE's success depends on a strong alliance with NEC

however, Guodian is also GE's biggest potential competitor. Guodian hopes to independently develop intelligent electric technology and equipment

Guodian is developing technical standards focusing on the establishment of high-strength steel and automobile steel brands, and is lobbying the Chinese government to adopt them, so as to consolidate its dominant position in China's domestic market

Copyright © 2011 JIN SHI