Blog Post

GE Fires Up Rail Deals in China, Eyes U.S. High-Speed Rail Projects

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

General Electric (s GE) started churning out plans earlier this year for cleaner heavy-haul locomotive technology, announcing its intention in May to produce batteries for hybrid trains in upstate New York and unveiling a new, more fuel-efficient locomotive model. This morning, the conglomerate has announced a set of agreements with various companies and the government of China that will help GE ramp up its locomotive business in the country — and potentially lead to a larger role for both GE and China on the road to a high-speed rail buildout in the United States.

GE has announced two deals related to rail this morning, including an agreement with China’s Ministry of Railways to advance partnerships that would allow the company to pursue high-speed rail projects in the U.S. with manufacturing provided by a Chinese partner (GE doesn’t currently manufacture locomotives for these types of projects). And it’s formed a joint venture with CSR Qishuyan to develop, build and service GE’s most fuel-efficient line of diesel locomotive engines, the Evolution Series, in China and eventually other countries as well.

Beyond rail, GE announced it has formed a joint venture with Shenhua Group Corp. to research and develop lower-cost “cleaner coal” technologies. The U.S. Trade Development Agency will finance the “initial steps” toward a coal power plant in China using GE’s “integrated gasification combined cycle,” or IGCC, technology.

GE already has a significant presence in China, running 36 wholly owned or joint venture companies and employing more than 13,000 people. But as the Wall Street Journal’s China Real Time Report notes, GE’s latest deals (including yet another joint venture, this one to produce software systems for airplanes, with the state-owned Aviation Industry Corp.), reflect a larger trend:

“Whether it’s autos or high-speed train locomotives, China’s markets are the only ones in the world still growing strongly. That puts China’s industrial state planners…in the driving seat as they negotiate with companies from the U.S., Germany and Japan who come knocking at the door. The trade is market access for technology.”

GE’s announcements coincide with President Obama’s visit to China this week and a set of agreements between the two countries on energy and transportation. This morning, President Obama and Chinese President Hu Jintao announced plans to cooperate on electric vehicle standards and demo projects, cleaner coal technology development, renewable energy planning and other projects.