From the Technology Review (for more information on China’s growing innovation capacity, see the most recent “Science & Engineering Indicators” report):

GE is starting to let its research and development organizations in China take the lead on research projects, rather than just playing a supporting role to its global research headquarters in New York…

Now it’s developing products in research facilities in China and selling them in China before finding new applications for these products in its more traditional markets.  GE says this is essential for competing in China, where many companies are able to offer low-priced goods and create new products for emerging markets such as China and India, as well as richer countries.

The increased competition for GE from local companies in China is due in part to a massive push by the Chinese government to promote clean energy and R&D. In recent years, it has rolled out a range of renewable energy targets and financial incentives, including significant tax breaks for companies that invest in research related to energy…

The GE research center has also been key for the development of wind-power technology, including power electronics hardware and software that allow wind turbines to keep operating after lightning strikes and other events cause sudden drops in voltage on the power grid. The center has now produced 20 patents in this general area, says Yunfeng Liu, the manager of GE’s power conversion lab in Shanghai.