GE has already teamed with France's SNECMA to produce engines for the Airbus A320 and A340 in addition to the 737.
Uniited Technologies' Pratt & Whitney and Britain's Rolls-Royce are the numbers 3 and 2 turbofan producers.
From the Wall Street Journal:
BEIJING—Foreign companies have been teaming up with Chinese ones for years to gain access to the giant Chinese market. Now some of the world's biggest companies are taking a risky but potentially rewarding second step—folding pieces of their world-wide operations into partnerships with Chinese companies to do business around the globe.
General Electric Co. is finalizing plans for a 50-50 joint venture with a Chinese military-jet maker to produce avionics, the electronic brains of aircraft. The deal with Aviation Industry Corp. of China would give GE access to a Chinese government project aimed at challenging Boeing Co. and Airbus in the civilian-aircraft market.
General Motors Co. established a joint venture this year with SAIC Motor Corp., its longtime partner in China, to produce and sell their no-frills Wuling-brand microvans in India, and eventually in Southeast Asia and other emerging markets as well.
The two deals show China Inc.'s growing international ambitions, as well as its increasing leverage over foreign partners. To make the deal happen, GE Chief Executive Jeffrey Immelt agreed to fold into the venture some of his company's global business in nonmilitary avionics. GM, in its deal, contributed technology, its manufacturing facilities in India and use of its Chevrolet brand name in that market.
Several forces are motivating China's foreign partners to strike global deals that would have been unthinkable a few years back. China's big government-backed companies now have enormous financial resources and growing political clout, making them attractive partners outside China. In addition, the Chinese market has become so important to the success of multinational companies that Beijing has the ability to drive harder bargains.
But such deals also carry risk. Several earlier joint ventures inside China have soured over concerns that Chinese partners, after gaining access to Western technology and know-how, have gone on to become potent new rivals to their partners.
"Foreign partners are seeing they will have to sometimes sacrifice or share the benefits of the global market with the Chinese partner," says Raymond Tsang, a China-based partner at consultancy Bain & Co. "Some of the [multinational corporations] are complaining. But given the changing market conditions, if you don't do it, your competitors will."
Big energy companies, too, have been pursuing international deals with Chinese companies. China has supplanted the U.S. as the world's biggest energy consumer, making access to its market vital for global companies. Foreign firms hope that teaming up with Chinese companies abroad will help on that front. Foreign companies supply technology and experience, and their Chinese partners provide geopolitical clout, low-cost labor, and easy access to credit that China's government-backed companies enjoy....MORE
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