General Electric ($GE) is delivering on its promise to expand healthcare in China with a new center in Chengdu for developing medical devices. In return, GE hopes China will deliver the growth it currently is missing on its bottom line for developing medical devices.
Speaking today, CEO Jeff Immelt said the $80 million Chengdu center is the second of many the company expects will give it a financial boost, reports Bloomberg. While the company is developing a diverse portfolio of products in China, the center in Chengdu is focused on medical devices designed for rural healthcare, like handheld ultrasound and teleconferencing technology, to allow doctors in urban hospitals to diagnose a patient in a rural clinic. It will include simulation areas where customers can try out technology and suggest improvements.
It is part of a $2 billion, three-year, commitment the company made in 2010 to expand in China. In December, Rachel Duan, head of GE Healthcare in China, said the company intended to add another 200 Chinese engineers this year. She said the company was introducing 40 new products over three years, most of them targeted at local markets.
Like many other drug and devicemakers, China and other emerging markets are seen as the the potential to provide lottery-like returns. GE also considers Peru and Australia as having big potential and is investing in Russia as well. Imelt said revenue growth in China has been 20%. That contrasts sharply with earnings declines it has seen generally, Bloomberg reports. The company in March said it expects to get 65% of its revenues from outside the U.S. by 2020.
- read the Bloomberg story