Thales to invest more in China,tap drive for high-end manufacturing
 

SHANGHAI: French electronics firm Thales SA will build a product development base in China to develop exports, taking advantage of the country´s drive to boost its high-end manufacturing base and shed its image as a low-value factory for the world.

Thales´ China head said that the transport-to-defence firm would raise investment in China to keep pace with domestic rivals, buoyed by government support for in**vative tech**logy development.

"Thales is **w moving some priorities towards building some product development capabilities in China in order to increase Thales´ overall in**vation base," China chief executive Laurent Guyot said during an interview in Shanghai.

Guyot declined to say how much Thales, 26 percent owned by the French state, planned to invest but said China, alongside the United States and India, was a priority.

He said investment in the country would focus on products that were adapted for China, but which would also sell well in markets overseas. This includes products such as an air traffic control system that is used to monitor 60 percent of China´s air traffic and has to deal with heavy congestion wrought by the country´s ongoing aviation boom, he said.

China´s slowing growth was evident in sectors like heavy industry, Guyot said, but areas such as transport and civil aviation remained dynamic, with 300 new planes added to China´s fleet of aircraft every year. Guyot didn´t disclose overall China sales figures or business targets for Thales, which had global revenue of 14 billion euros ($15.5 billion) in 2015."We are going to invest a lot in the local entity," he said, referring to the joint venture that oversees the air traffic system that was set up by Thales and China´s Civil Aviation Air Traffic Control Tech**logy Equipment Development Co. "The challenges that China faces will crop up elsewhere," Guyot said. Thales also sells products such as metro rail signalling systems in China, where it employs 1,200 staff and has four joint ventures. An ongoing boom in urban subway construction will help the metro signalling business - managed by a joint venture with state firm Shanghai Electric Group - grow sales around 10 percent annually, the JV´s head, Georg Koepfler, said in a separate interview.

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