Jeffrey Immelt on China - 2010 NCUSCR Gala

Thanks, Mike, and thanks to all of you. On behalf of GE, I accept this award tonight. Thanks to the council, Carla, thank you, Mike, Steve. I particularly want to thank Hank Greenberg, who's been my friend for many years, somebody that I look up to and have learned a lot from. I've sold a business to Hank, I learned a lot from Hank in those activities, and I live to tell the story. So, Mike, my order book is out tonight, so if you want to buy a few more engines, I'm available for that. I'd also like to congratulate Jim, CEO of a great company, Caterpillar, that I have so much admiration for. And really, all of the employees of GE are proud to be associated with China and proud to be associated with a great event like tonight. I'd make just five quick comments to maybe recap some of my thoughts on the importance of China and the importance of the relationship between the US and China. I just returned back from a trip to India and China this week; I returned yesterday. Every time I go, I'm just quite amazed at how fast these countries change. They're different in nature, but the new business models and the growth of the coming decade is really going to be shaped in countries like India and China. I joined GE in 1982. In the decade of the 80s, the developed world created about 85 percent of all the global growth. In the next decade, the emerging markets will really create the global growth, 80 percent of the GDP. And so these forces, these incredible forces that have been unleashed, aren't going to be turned back. The amazement, the new business models, the passion, and the energy is profound. It's energizing, and I certainly want GE to be a part of it. So point number one is this is happening; it's not going to be reversed, and China's role as an economic force in the 21st century is just unmistakable. Point number two: the government in China is now rolling out the 12th five-year plan. I think there's a lot to like in this plan for multinational companies and for American business. One of the things I learned, my first trip to China like Jim was in the mid-1980s, I've learned over time that doing business in China is quite simple: just do what the government tells you to do, and you're always going to be fine. So I've become a student of these five-year plans. And it really boils down to clean energy, more domestic consumption, more innovation on a local basis, and engagement of the west and north in the country. And so it opens up new doors to partner with state-owned enterprises. Just this week, we announced another two billion dollar investment in China that has to do with building six innovation centers where we can work with our Chinese customers to innovate on a local level and produce products that they want, and four joint ventures with state-owned enterprises that we think are going to be relevant both in China and on a global basis. So we see a whole new avenue of growth in every five-year plan, and the Chinese government does what it says it's going to do. A lot gets written in the press in the United States, particularly today, about the secret of the Chinese success. I'm not smart enough to talk about currency; there are other people in the room that can talk about that. But the secret of the Chinese success that I've seen is they work hard, they work with passion, they execute well, and that can't be discounted. So at GE, we want to be a part of it, we want to be a part of the economy, we want to be a partner, and we think we have decades of great growth ahead in China. Point number three: there's just no case to be made for the two largest economies in the world to not work together. The world needs a good relationship between China and the United States, and I think that has to begin sooner than later. I think there's good will on both sides, but it is incredibly important. I've always thought that the two countries would benefit from a vision and a mission. For instance, one of the things that I would love to see is that China and the United States from a bilateral relationship on clean energy. I don't know where climate legislation is going to go in the United States; I have no idea. But I do know if there is a force of will between China and the United States to provide energy security, low cost, and reduce carbon, it would drive more action faster than any Copenhagen or any other council could ever do. So we need a mission, we need a vision, we need an initiative to bring these two countries together again. Point number four: we've had a bad year for free trade. There's more protectionism in the United States than I can remember in a long time. There's more protectionism around the world than I can remember, including China. We need to have free and open markets. Free means free. CEOs have to restate the case for global trade. We can't take it for granted. We have to demonstrate that there's a win-win, we have to demonstrate that both sides benefit, and we have to do that soon. So we're having tough times within the economy, misunderstandings, but business can't take for granted that this great engine that we believe in on globalization will just happen naturally. And so people like Jim and me and the other people in this room have to do a better job to explain the benefits of globalization on all sides. So growth is real. The next Chinese five-year plan offers big opportunities for all of us. We need a win-win between the two biggest economies in the world. We've got to fight again for globalization. And my fifth point is in China, relationships count. A sense of personal relationships and trust count as much or more in China than anyplace else. I've traveled the world my whole career like Jim; 60% of GE's revenues are outside the United States. That's quite remarkable and a lot of growth. But I've always thought globalization in a corporate setting boils down to two things: you have to know how to make money in a country on behalf of your investors, and you have to know how to make money for a country to be welcome year after year after year. So our vision in China is nothing less than we think China is going to be the second most important market for GE in the coming decades. We know how to make a profit in China for our investors, but we also know how to be a good investor in China so that we're a trusted friend. But at the same time, we also have a vision for the United States: we're going to invest to be a high-tech exporter from the U.S. We think that there's a repurposing that's available to this economy so that people are less afraid of globalization by investing in education, manufacturing, and technology to ultimately be a better exporter. So that's what I would share tonight. We can't take this relationship for granted; it has to be a pillar. But the growth is real, the prospects in China have never been greater. We need a great relationship between the U.S. and China. Business is going to have to fight for the right to globalize. And trust and friendship really counts in China. I'm honored again to be here tonight with such a great group, friends like Hank and Jim who I've known for many years. It's honored to be with them, my friends from China. It's great to be here. I grew up in Cincinnati, Ohio. My father worked for GE for 40 years. I was never more than 50 miles away from my home until I went to college. To spend the last 30 years traveling the globe, learning so much, has been the great gift of my career. I can't tell you how much I've learned by just having friends and seeing the world. It's so invigorating, it's been so meaningful for me. And somehow we have to share this great gift with the other people in our country who are afraid of globalization so that we don't go backwards. So thank you very much. I'm honored to be here tonight.