GE’s Immelt loves China after all
By George Chen
The opinions expressed are his own.
During a visit to Beijing on Tuesday, General Electric’s chief executive, Jeffrey Immelt, announced that GE would invest more than $2 billion to expand the company’s research and development in China.
The largest U.S. conglomerate, GE will spend $500 million on research and development and more than $1.5 billion on technology and financial services joint ventures.
This announcement comes from the same man who, in July, revealed his doubts on the outlook for foreign businesses in China. Immelt and many of his peers in the technology sector, such as Google and Microsoft, are concerned about China’s ambition to acquire foreign technology, to further develop it and their use of it to compete against foreign companies such as GE in the global market.
So what made Immelt change his mind?
There is rapid pressure of competition among technology companies so they see emerging markets such as China as a way to maintain earnings growth, especially in the wake of the financial crisis. And investors on Wall Street and London are eager to hear their China story. Think of the population there. Think of the country’s massive infrastructure expansion. Think more.
China is not a country Immelt and other CEOs can ignore. It seems like Karl Marx was right. Capitalists will always chase the maximum possible for capital expansion. Money never sleeps. Money just goes to wherever it can become even more money.
George Chen is a Reuters editor and columnist based in Hong Kong.
Top photo: General Electric Company Chairman and CEO Jeffrey Immelt delivers a speech during the opening of GE China Technology Center in Shanghai October 23, 2003. General Electric, one of the world’s most profitable companies, expects to generate $3 billion in sales from China this year and wants to invest in the country’s vast financial services sector.