GE snubs U.S., sells technology to China

By Catholic Online (NEWS CONSORTIUM)
8/25/2011
Catholic Online (www.catholic.org)

Despite risks, General Electric says China is too big a market to pass up.

As reported by the Washington Post, General Electric (GE) has entered into a contract with China's state-owned aviation industry to provide advanced technology for their aircraft. And while GE insists it's taking precautions to make sure the technology isn't copied or used for unintended purposes, many experts are crying foul.

GE is betting that China will deal ethically with US developed advanced technology.

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LOS ANGELES, CA (Catholic Online) - General Electric has agreed to send several technologically advanced components and instruments to China as part of a plan to position the company strongly in the growing Chinese market. China's booming economy and strong forecast means the Chinese aviation industry is set to grow rapidly over the next several years and GE wants to earn a share of that money by providing the technology that will help fly those planes. However, when dealing with China, things aren't always what they seem.

Despite GE's insistence this is purely a business deal, which on-face, it is, GE is taking a substantial risk. China is notorious for using foreign corporations to gain access to key technologies, and then copying them and developing their own internal source for them, thereby cutting out the original developer and keeping the profits. Indeed, China is known for "bootleg" --well, everything, and advanced technology is no exception.

While GE will certainly earn substantial short-term profits, there's no guarantee that China will simply continue to pay GE for its products and refrain from copying them. Furthermore, there's little guarantee that China won't also use GE's technology to develop its own military capabilities.

GE's deal costs US jobs

Under the current agreement, China will use GE technology to construct its own airliners. This decision will cost American jobs as China will be able to build their own technologically advanced airliners instead of purchasing them whole, or their component parts from US manufacturers such as Boeing.

Despite the criticism these realities bring, GE defends its position. In a recent article in the Washington Post, GE's Aviation Systems Chief Executive, Lorraine Bolsinger, was paraphrased as claiming the opportunity was too great to be missed, "even if most of the jobs are created in Shanghai or elsewhere in China."

There's little doubt the decision will boost GE's market share and stock prices in the near-term. And whether or not GE creates jobs in the US is of little concern to Wall Street. But if the Chinese eventually decide to duplicate and produce their own versions of the GE technology, the strategy could backfire.

Not only will China be in position to provide their own versions of GE technology to themselves, but they could also begin exporting it as well, cutting GE out of their own markets in the future. If that happens, it may be just desserts for GE, but it will also be bad news for the US and our future.

� 2011, Catholic Online. Distributed by NEWS CONSORTIUM.

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Keywords: General Electric, GE, China, advanced technology, jobs, profits, Wall Street

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1 - 8 of 8 Comments

Humbert Epithet
1 year ago
I think its great, only through trade and co-operation can be learn to live in harmony with our Chinese brothers.
Rob
1 year ago
Frank, the problem is that this issue is much more widespread than GE. Honestly, how can we realistically be "shocked" at what GE is doing when China funds our government and supplies almost 100% of our consumer goods? Either China is our enemy or not. We can't pretend we are shocked at this while we do the massive amounts of business we do with them. Pay close attention how candidates on either side of the aisle have never recommended we stop trading with China. What you are seeing with GE will become the norm. As we go broke the defense contractors will begin selling to the highest bidder. Just wait and see.....
Frank
1 year ago
Reason enough to boycott GE. Their appliances have been going down the hill anyway.
Rob
1 year ago
Tech, you are looking at this issue to narrowly. The moment we started purchasing virtually everything from China was the day we handed over the keys. Selling military secrets is the only logical extension of everything else that has been handed over to this country. For all our talk about the founding fathers, our constitution etc, it's absolutely insane that we've allowed China, a purported enemy, to own us lock, stock and now barrel. Our obesssion with material things and the almighty dollar is just one of the pegs that will eventually be the downfall of this country.
Tom Dundee
1 year ago
What was said about Clinton is true, but it went way beyond Clinton. Dianne Feinstein is one of many of our Congressinal leaders who have become rich by trade with China. Of course that would be a conflict of interest and give the appearance of an impropriety, so her husband became rich and she received no benefit.
Steve
1 year ago
Outrageous & just so wrong for America. Pure greed. God, help us.
techwreck
1 year ago
We used to call people who sold vital national technology to foreign nations "traitors", who were subject to prosecution for a capital crime. Apparently that changed during the Clinton administration when a major Democrat donor sold missile technology to the Chinese with no charges.

Look for Jeff Immelt to sell this country down the road with no repercussions as the Obama administration comes to a close in 2012.
Rob
1 year ago
Absolutely sickening. And to think that Obama has a GE guy as an advisor. But am I shocked that they are shipping more jobs off to China, heck no. That's what corporations do these days. All about the bottom line and they could care less about the people they leave behind. An economy that does not have people as it's central focus will fail. Those were wise words from the Pope and I guess we just didn't get the memo.

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