By Kathy Chu
General Electric Co.'s China head expects the company to
continue posting double-digit order growth in the country despite a
slowing economy and a government anticorruption campaign that has
delayed approvals for large-scale projects.
"In the short term, the country is going through some
adjustments," said Rachel Duan, who became GE's chief executive for
greater China in July, the first female or China-born native to
hold this position. "We really don't see that as a longer-term or
macro problem."
In the third quarter, China's economy expanded at its slowest
pace in five years as the country battled a slumping real-estate
market and weak domestic demand. Meanwhile, Beijing's widening
crackdown on corruption has consumed local government resources and
slowed project approvals.
GE employs 18,000 people in China, with some of its fastest
growth coming from its health-care, energy and aviation businesses.
While the conglomerate is seeing delays on some projects it is
bidding for in China, particularly in the energy and health-care
sector, GE expects these to have only a short-term impact on its
operations, said Ms. Duan.
"We are very positive and enthusiastic about what the country is
doing" in rooting out corruption because it levels the playing
field for all companies, Ms. Duan said.
The executive also believes the conglomerate is well-positioned
to capture the growth of China's swelling middle class despite
headwinds facing China's economy.
"The direction the new administration is taking the country is
the right one," she said. The government is "trading the speed of
growth for the quality of growth, shifting to more
consumer-oriented growth."
While China is seen as a promising growth opportunity for GE,
the country has also been challenging. The government's requirement
that foreign businesses partner with domestic companies means that
it takes longer for ventures to be put together and to mature, GE
executives have said.
GE had targeted $10 billion in revenue in China from key
business units including health care, energy and aviation by 2010,
but was just halfway there as of 2012, the company has said.
GE doesn't regularly break out its China revenue. But the
company said that in the latest third quarter, orders across GE's
business units grew 26% in China.
China "is more of a micro story than macro story now" for
companies in the right industries, GE Chief Executive Jeffrey
Immelt said during the company's earnings call last month. Mr.
Immelt said that for companies in industries such as aviation and
health care, growth is "very robust."
Write to Kathy Chu at kathy.chu@wsj.com
Access Investor Kit for General Electric Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3696041033