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Power: Four of China's five major carriers have ordered GE engines for their boeing fleets. | photograph by Roy Zipstein

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China's Airport Boom

More than a billion people were watching late last year when the first commercial airliner ever built by a Chinese firm rolled off the assembly line in Shanghai. China's state network, CCTV, broadcast it live, a proud symbol of the country's rising technical prowess. Yet if you looked closely, there was another peacock preening. Of the 19 suppliers that collaborated on the 90-passenger regional jet, only one had its logo on the plane: General Electric, which built the engine. No surprise, perhaps, that GE subsidiary CNBC was the only foreign network permitted to cover the event.

There is no company on the globe that's better at leveraging the multiple parts of its business to feed growth than GE. And there is no better vehicle for illustrating this corporate strategy than the company's aviation activities in China. "Every aircraft, every engine, every building we help build in a market like China, we view as a GE marketing tool," company chairman and CEO Jeff Immelt told Fast Company.

Immelt and other top GE strategists love to talk about the opportunities presented by "white spaces" and "adjacencies" -- corporate-speak for untapped markets that the company wants to develop, and for expansion opportunities that one GE business unit can pass along to another. Steve Bertamini, who oversees all of GE's operations in China, can point to both in his realm -- and he's not referring just to GE's sponsorship of the 2008 Olympics. "The Chinese are beginning to shift growth out of the major metropolitan cities like Shanghai and Beijing and move into tier-two cities," he explains from his office in GE's 150,000-square-foot R&D center in Shanghai. He notes that China has 120 to 150 cities with populations of more than 1 million, compared with 9 in the United States and 36 in Europe. "We figure in this next five-year period, the Chinese government is going to spend $2 trillion on infrastructure projects. We think there's probably a good chunk of that, let's say at least half, that has some GE opportunity. I just got back from Inner Mongolia yesterday, and there are probably $2 billion worth of projects for us to take a look at. And I've only got five people on the ground there."

Aviation and jet engines aren't the only way GE will try to tap this market, but they are a key: China is slated to open more than 40 new airports by 2010 -- at the end of 2006, the country had 147 -- and another 55 or so by 2020. The country's evolving airport geography is like a treasure map that pinpoints where the government is going to make massive investments. "Every time I go to China to visit our customers," says Scott Donnelly, CEO of GE Aviation, "all they want is more aircraft." GE's aviation business is already booming in China, with back orders of more than $5 billion for engines and lucrative service agreements. Four of the country's five major air carriers have signed on to purchase 84 GE engines -- worth $1 billion -- for their new fleets of Boeing 787 Dreamliners. And there are 173 orders for the Chinese-built regional jet, powered by GE engines, that was launched with such fanfare in Shanghai.

Yet that business is only the tip of what GE hopes to glean from China's second-tier-city investment. Unlike its aero-engine competitors Rolls-Royce and Pratt & Whitney, GE is a conglomerate that can exploit all the market opportunities its aviation experts discover in a countrywide airport plan. In other words, the adjacencies are the billions in power grid, water, and rail projects that inevitably accompany urban modernization. And the best way to understand how the company plans to leverage its way into those dollars is to visit another second-tier city, here in America. You need to go to Cincinnati.

"Building a commercial jet was China's dream, and it was decades in the making," says Amy Zhang, a marketing manager for GE's aviation unit. She is sitting in a conference room in a nondescript office park in the Cincinnati suburbs. It is one of several GE locations in the area. At the company's aviation headquarters, in nearby Evendale, where aviation unit CEO Donnelly works and where the company's classified military engines are designed, visitors must show proof of citizenship and relinquish their camera phones before entering. But here among the nose-high cubicles, security is light.