China is quickly taking the lead on innovative energy projects. Last August, for example, the country announced a plan to invest up to $15 billion in a state-run project that will develop standards for hybrids and electric vehicles. Earlier this month China developed a fuel reprocessing technology that can extract useful byproducts from "spent" nuclear fuel. And for GE, that makes China the land of opportunity—which is why the company announced this week that energy-related deals signed with five Chinese partners will generate $2 billion in revenue.
The deals include ventures in clean coal technology, high-speed rail, avionics and wind turbines. In total, the projects could bring $1.4 billion in U.S. revenue and create 5,000 new jobs, including many from U.S. suppliers.
The clean coal deal is part of a partnership with Shenhua Group Corp. that will turn coal into clean-burning gas for commercial facilities, according to Bloomberg. It is expected to create jobs in China, as well as in Texas, South Carolina, and New York.
The most interesting deal is with Aviation Industry Corporation of China. In 2008, we wrote about how GE's jet-engine division was boosting the company's China business. Now, as part of the new partnership with AVIC, GE will share its most advanced airplane electronics technology (including electronics used on the new Boeing 787 Dreamliner) in an attempt to get a piece of the country's multi-billion dollar commercial aircraft market. Ultimately, China will use GE's technology to compete with established aircraft companies like Boeing and Airbus.
GE has also created partnerships with Harbin Power Equipment Co. and State Grid to build wind turbines and smart-grid technologies, respectively.
On the surface, the deals may appear threatening to American energy and aviation companies. But there is no stopping the meteoric rise of Chinese industry. GE will milk China's interest in energy for a long time to come—the country expects to spend $750 billion over the coming decade developing clean sources of energy.