GE’s Expansion Strategy for China
9/5/2013 8:36:00 AM
Distinguished Global Speaker Mark Hutchinson, President and CEO, GE Greater China, outlines GE’s operations in aviation, healthcare, and energy, and proclaims: “China is not slowing down.”
Mark Hutchinson is bullish on China. In fact, when he spoke to Johnson MBA students at Sage Hall on Sept. 3, he said “I love China; it’s awesome. What we’re doing in infrastructure makes it the most exciting place in the world.” Moreover, he added, “China is not slowing down” — regardless of what people may be reading in the American press.
Hutchinson, whose career spans 20 years at GE, was appointed the president and CEO of GE Greater China in March 2011, visited Johnson as a Distinguished Global Speaker, hosted by the Emerging Markets Institute. He is responsible for leading the company’s growth strategy in China, where GE already has more than 18,000 employees and plans to grow by an additional 30 percent in China this year. And he was out front about his interest in recruiting Johnson MBAs to join GE there.
“China still has a ways to go regarding rule of law and IP; the reform ahead is mind boggling,” Hutchinson acknowledged. But he’s confident in the country’s new leaders: “I’ve met most of the members of the new government, and they are an impressive group.”
Clean energy presents a huge opportunity in China, where 80 percent of electricity is coal-based, creating a huge negative impact on air quality, Hutchinson noted. Consequently, there’s an insatiable demand for clean energy. For GE, natural gas is a big part of that clean energy picture. “Shale gas in the United States is huge: it’s cheap, predictable, and changes the geo-political landscape,” he said. “It’s the same in China: Natural gas presents a major energy shift. … This is the age of gas. It will change the world in the next 20 years.”
In addition to energy, Hutchinson spoke about GE’s other major areas of business in China:
Aviation: “China is building 250 airports and buying 500 airplanes per year.”
Health care: “We sell equipment to 2,000 hospitals in China — but there are 90,000 hospitals there.” He also spoke of designing tools to meet the needs of specific customers; for example, hand-held ultrasound devices for rural doctors.
Hutchinson also touched on manufacturing and sourcing, including game changers in advanced manufacturing such as 3D printing — which will increase the ease of making models — and the industrial Internet — which involves gathering data from all machines, synthesizing it down, and turning it into predictive analytics that will, for example, reduce down time on machines.
Hutchinson went on to list several items that encompass GE’s strategy in China:
· Help China solve its environmental problems
· Help China improve quality of life
· Develop China talent
“What’s wonderful about China is its 5-Year Plan; they broadcast to the world what they’re going to do,” said Hutchinson. “So we spend a lot of time looking at this. … Our goal is to be the partner of choice in China.”