China XD Electric Co., Ltd. announced on Friday a strategic alliance with the General Electric Company to tap China's vast electrical infrastructure market.
The Shanghai-listed company in May of this year transferred a 15 percent stake worth 3.38 billion yuan (546 million U.S. dollars) through private placement, making the U.S. conglomerate its second-largest shareholder after parent company China XD Group, which now holds a 51.10 percent stake.
The two companies also agreed to form a joint venture to distribute GE's electrical grid solutions to XD's local customers.
The alliance between the two companies is a crucial step for China XD Electric in implementing its "going abroad" strategies, said Zhang Yalin, board chairman of the company.
Zhang said the move would help the company build its advantages in the traditional market while serving the the structural adjustment of China's energy industry.
XD Electric will benefit from GE's advanced management experience to boost the company's "soft power" in its efforts to expand globally, he added.
Dan Janki, president and CEO of GE Energy Management, said cooperation between the two sides will enable them to offer solutions to China's rapidly growing transmission and distribution industry. The cooperation will also sharpen GE's competitiveness in the Chinese market, he said.
China XD Electric is one of China's largest primary equipment providers and exports to over 40 countries.