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Electronics giant follows new post-WTO R&D model
( 2002-03-01 00:56 ) (1 )

US-based General Electric (GE) is planning to set up a global research and development (R&D) centre in Shanghai's Zhangjiang High-Tech Park.

The move by the electrical appliance giant is hailed by city officials as a new model of foreign investment in China, following its accession to the World Trade Organization (WTO) in December.

An agreement was signed on Wednesday between GE (China) R&D Centre Co Ltd and Shanghai Zhangjiang High-Tech Park Development Corp (SZHPDC).

Under the land use right transfer agreement, GE secured a 47,000 square metres of land at the park for the first-phase construction of the new global R&D facility.

Scheduled to begin operations in 2003, the facility will be expected to employ 400 research staff, who will represent all of the research and technology functions of GE's businesses in China, including GE Plastics, Silicones and Lighting.

"The centre will help GE further its presence in China through building technology leadership,'' said Steven J. Schneider, chief executive officer (CEO) of GE (China) Co Ltd.

While another 67,000 square metres has been reserved for its second-phase construction, the new R&D facility will be GE's third such facility; the others in New York and India's Bangalore.

Marking GE's 27th investment in China during the past 12 years, the new centre is regarded by Schneider as the natural expansion of GE's Shanghai Research Centre, set up in June 2000, in accordance with arising local business needs.

"The centre will serve both China and the global market of GE,'' said the CEO.

Given the country's WTO entry, Schneider confirms that GE will "continue its track'' in the coming years in terms of investment in China, where it has invested up to US$1.5 billion.

While keeping its expansion in the industrial sector, GE is "most likely to get more involved in the domestic capital sector'' as China opens such a market, said Schneider, revealing that GE maintained an approximate 18 per cent increase in the total revenue of its China-based businesses last year.

On the side of Zhangjiang High Tech Park, GE's move is expected to entice other multinationals to set up R&D facilities there.

"Instead of merely manufacturing workshops, R&D and innovation should be the highlights of our park,'' said Dai Haibo, president of SZHPDC.

Since its birth 10 years ago alongside the development of the city's Pudong New Area, the park has hosted 320 investment projects, among which two-thirds are functioning as R&D facilities for either multinational or domestic companies like LG and Legend, according to Dai.

"With its biggest-ever scale and multi-disciplinary research capabilities, the new GE R&D centre will definitely serve as a model for other big-name companies to follow,'' noted Dai.

He further revealed that his company will finalize talks with three other multinationals within the year in terms of setting up similar large-scale R&D facilities at the park, yet he declined to elaborate.

Official statistics indicate Shanghai hosts more than 40 global or regional R&D centres set up by multinationals, and domestic enterprises have also set up more than 200 technical centres in the city.

(China Daily by Liang Yu)