Davos WEF
Davos WEF

'Plenty of room for growth' in China: GE

You have to bet on China: John Rice

China still has "plenty of room for growth," GE 's vice chairman told CNBC on Wednesday, rejecting fears of a hard landing for the world's second-largest economy.

"There is plenty of room for growth. If you are in the infrastructure business and you take a long view, you have to bet on China, you have to be a part of it," Hong Kong-based John Rice said from the World Economic Forum in Davos, Switzerland.

The Chinese economy has slowed steadily since 2010. On Tuesday, it posted 6.9 percent growth for 2015, in line with economists' estimates in a Reuters poll. Growth is seen by the International Monetary Fund at 6.3 percent in 2016 and 6 percent in 2017.

A woman is reflected on the black door of a General Electric (GE) refrigerator at a store selling electronics and appliances in Montebello, California on January 15, 2016.
Frederic J. Brown | AFP | Getty Images

GE remains committed to China, announcing plans last Friday to sell its appliances business to Haier Group for $5.4 billion, in one of the largest Chinese acquisitions of an American company yet.

The transaction has been approved by the boards of directors of GE and Haier and is targeted to close in mid-2016. However, regulatory approval could be delayed in the run-up to the presidential elections in November.

"We believe it is really a very good strategic fit," Rice told CNBC.

"It is really good for our business and our employees in the U.S. They are going to commit to keeping the headquarters in Louisville, Kentucky, maintaining employment levels. They already have a manufacturing base; they are a credible U.S. company and they have a very progress management team," he added.

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Republican presidential candidate Donald Trump, has criticized U.S. corporate giants that use cheaper Chinese labor rather than manufacture at home. His plan to "make America great again" includes pressing Apple to manufacture its products back in the U.S.

Regarding GE's presence in China, Rice said: "We have thousands of jobs in the United States that exist because we can do business in China, in our jet engine business, our gas turbine business, our health-care business.

"All of this, it's a global business ecosystem, it is a global supply chain and it feeds into our production, whether that production takes place in the United States or another country."

Concerns about China's handling of its economy and financial sector were piqued last summer when authorities intervened in equity markets and devalued the currency amid a stock market rout.

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Chinese stocks posted further losses this year as a result of weak manufacturing surveys, the depreciating yuan and the introduction of circuit breakers in the stock market.

Chinese markets were volatile on Thursday, with the main Shanghai composite and Shenzhen composite indexes extending losses after posting modest gains.

Earlier, the Shanghai composite traded up as much as 0.7 percent and the Shenzhen rose by almost 1 percent.