GE expects business in China to double

Immelt expects it to reach $10 billion a year.

BEIJING (AP) — General Electric Co. expects its business in China to double by 2010 to $10 billion a year, Chairman Jeff Immelt said Monday, in a bright spot for GE after the U.S. credit crisis forced it to cut this year’s earnings forecast.

GE expects China’s efforts to improve energy-efficiency and clean up its environment to drive 15 percent to 20 percent annual sales growth for GE’s clean-energy technology, Immelt said. He said GE also should benefit from heavy spending on other infrastructure for fast-expanding Chinese cities.

“We’ve seen great growth in China,” Immelt said in an interview at GE’s pavilion at the Beijing Olympics, of which the company is a top sponsor. “I think the whole focus on water and the environment, that’s going to offer, we think, big opportunities for us as time goes on.”

GE says it has generated $1.7 billion in revenues from the Olympics — $700 million in sales of power and other equipment for sports venues and $700 million in advertising for its NBC television network, the U.S. broadcaster for the games.

Immelt said GE is sticking with its forecast of zero percent to 5 percent earnings growth this year. GE cut its forecast in April after reporting disappointing first-quarter results due to the U.S. credit crisis. Immelt said earnings at its financial services unit, which supplies 45 percent of GE profits, are expected to be down as much as 10 percent this year.

“It impacts us, but I think we’ve kind of managed our way through it pretty well. We haven’t had any big write-offs,” he said.

Immelt said Fairfield, Conn.-based GE expects to see some “great deals” on acquisitions due to depressed asset prices.

“Some of the best opportunities we’ve seen in the last 10 years we’re seeing right now. Assets are cheap,” he said. “In financial services, sometimes bad news is good news. You’ll see some great deals done in this cycle, and we’ll do some of them.”

Immelt said a reorganization announced in July is aimed at simplifying GE’s structure and focusing on its finance and infrastructure businesses.

“It’s another natural evolution for the company,” he said. “It’s another way to simplify the company and run it better.”

GE has 12,100 employees in China and one of its four global research-and-development centers is in Shanghai. The others are in the United States, Germany and India.

GE says it plans to spin off its lighting and appliance units, but Immelt said the company is still open to offers to buy them. He earlier cited China’s Haier Group and South Korea’s LG Electronics Inc. as possible buyers of the appliance arm.

“There’s a lot of interest in it,” he said. “This is a great way to expand into the United States. Our base case is to do a spin to investors, but I think the appliance business makes sense to a lot of people out there.”

But GE has no plans to sell its NBC Universal media unit, Immelt said, despite pressure from some investors to jettison a business that they say has little connection to the industrial and financial conglomerate’s other activities.

“I always say, look, it’s a good business. We run it well,” Immelt said. As for talk of a possible sale, he said, “We’ve never contemplated it. We don’t think about it. We like the business.”