General Electric chief executive Jeff Immelt said yesterday that the world's biggest industrial conglomerate is "extremely healthy" and forecast China will become a key strategic pillar with revenues of US$3 billion this year.
"Because the [growth] trajectory is close to 30 percent ... if you take where China is investing money it matches pretty well with what GE does," Immelt said at the opening of GE's US$64 million China Technology Center, a research and development facility.
He said that as China builds up major power and infrastructure projects, the country will become increasingly important for GE in the face of declining opportunities in developed Western markets.
"This is the fastest-growing economy in the world," Immelt said, predicting US$3 billion in revenues this year growing to US$5 billion by 2005.
Two weeks ago GE posted an 11 percent drop in net profit during the third quarter, as accounting changes and slumping sales of power systems and jet engines hurt the giant US group.
GE, which has interests ranging from finance to medical equipment and aircraft engines, reported a third-quarter net profit of US$3.65 billion compared with US$4.09 billion in the same period of last year.
Annual growth forecasts for this year have dropped sharply to between 3 percent to 5 percent, compared with 7 percent last year and 11 percent in 2001.
Despite the downturn Immelt said GE was "extremely healthy" and that in discussions with Shang-hai officials yesterday, he was told that power demand in the city would double in the next decade.
"When I look at the expansion in Shanghai, expansion in China, these are all projects where GE can have a substantial role ... roads, airports, these are worth hundreds of million of dollars for GE," he said.
Compared with GE's global sales of US$130 billion last year, GE had revenues in China of US$1.7 billion, and it is forecast to surpass Japan and even the US to become the company's largest mar-ket in 10 years. Japan, China and India already are GEs three key Asian markets, making up around 15 percent of its global revenue.
Immelt said there were other significant opportunities in China and cited the 2008 Olympic Games as an example. Opportunities in financial services, which account for more than half of GE's global sales, are further away, however, due to China's tight control over the opening of the market.
"In the next one, two, three years, GE will make small investments in financial services so that we will have a starting point when the WTO lets us expand in China," he said.
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