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Siemens Confident in Local Market

German conglomerate Siemens AG will further tap the potential of the Chinese market in its global operation with increasing local procurement and research and development.

Siemens President and CEO Heinrich von Pierer said yesterday in Beijing that China has become the world's third largest electrical market, but the country's robust economic growth -- especially with opportunities springing from the Beijing Olympic Games, the World Exposition in Shanghai in 2010 and the Asian Games in Guangzhou in 2010 -- will provide more stimuli.

"We have the right strategy, right product offering and right people and we are well prepared to get prosperous with China," said von Pierer.

He said Siemens has set a goal to double sales in the medium term.

In the 2004 fiscal year ending on September 30, Siemens AG China won contracts of 41.8 billion yuan (US$5.05 billion) and sales stood at 38.4 billion yuan (US$4.64 billion), rising 34 per cent and 28 per cent year-on-year.

The German giant said in May that it would invest 1 billion euros (U4$1.33 billion) in the next few years in the market and its operations in China would play a more and more important role in its global map.

The company will increase its annual local procurement in China from 22 billion yuan (US$2.66 billion) last year to 50 billion yuan (US$6.04) in three years. Local personnel will be a big help to Siemens.

Richard Hausmann, Siemens AG China president and CEO, who took office on January 1, said personnel would be the most important asset of his company and localization of people will be one of his major tasks.

Siemens China will employ 5,000 new hands in 2005, after already adding 4,000 jobs in 2004. It now has 31,000 employees.

A large portion of the new jobs will go to research and development facilities, a focus of the German company's local development.

It will increase its local R&D team by 50 per cent.

In its mobile phone business alone, it will add 200 researchers in 2005 to make the total 1,000.

Siemens also planned to establish a global broadband R&D centre in Beijing.

In regional expansion, Siemens will open nine offices in China, after adding 11 last year. It now has 38 regional offices in the country to learn about and meet the needs of local customers.

The German giant, which provided technologies and equipment for the 30-kilometre-long Shanghai maglev, said China is considering extending the maglev model into a high-speed railway between Shanghai and Hangzhou and is making feasibility studies.

Von Pierer said if the Chinese Government decides on the maglev technology, Siemens would be interested in working with the Chinese Government and partners.

A new round of bidding for high-speed trains may also happen this year and Siemens will try to join the project.

In the nuclear energy business, Siemens will also be interested in participation through its joint venture with French firm Areva-Framatome.

(China Daily January 7, 2005)

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