GE's Rice sees China growth slowing in 2012

Wed Feb 15, 2012 5:45pm EST
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By Scott Malone

WASHINGTON (Reuters) - General Electric Co (GE.N: Quote) believes China's economy, a key source of revenue growth for the largest U.S. conglomerate, will slow this year but not substantially below 8 percent, said the executive who runs the company's international operations.

"The growth rate in China is going to be a little bit lower than we thought a year ago. But still a very manageable, healthy if you will, 8 percent," Vice Chairman John Rice said on Wednesday. "If it does drop below 8 percent for a while, that's not the end of the world either."

The world's biggest maker of jet engines and electric turbines still expects to record double-digit revenue growth in the world's second-largest economy this year said Rice, who is based in Hong Kong.

Multinational manufacturers including United Technologies Corp (UTX.N: Quote) and 3M Co (MMM.N: Quote) have already felt the pinch from Beijing's efforts to dial back the recent torrid pace of growth in China to fend off any risk of the economy overheating.

Last year's wave of popular uprising across the Arab world could serve to stimulate emerging-market spending on infrastructure equipment, as leaders realize the need to keep improving the lives of their populations, Rice said on the sidelines of a GE-sponsored conference on U.S. economic competitiveness.

"Somewhere between 25 and 30 percent of the world's population lacks the basics (of modern technology) and the pressure to follow through on those investments, to create affordable power generation and reasonable health care got more acute last year during the Arab Spring," said Rice, referring to uprisings last year that ousted the leaders of Tunisia, Egypt, Libya and Yemen and touched off Syria's unrest. "Countries around the world saw what happened and they're paying attention. In some places the infrastructure investments will be the last things cut in a downturn."

GE makes electric turbines, water-purification systems, medical equipment and other infrastructure equipment that developing nations invest in as they industrialize.


Vice Chairman of GE and CEO of GE Global Growth and Operations John G. Rice speaks during an interview at the Andrew W. Mellon Auditorium in Washington February 15, 2012.       REUTERS/Larry Downing