Siemens Strikes Broad Power Industry Deal with China, Comes Under Fire for Russian Meeting

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Trade alliances between major global industrial players are in vogue as the world becomes smaller through telecommunications, and markets become larger as they become regional rather than national. The alliances are not necessarily guarantees of peace. In the global conflicts of the 20th century, such pacts were suspended during conflicts, only to spring to life when peace was secured.

Advanced gas turbines, steam power plant technology, the modernization and upgrade of steam turbine units, and wind power are the segments covered by a memorandum of understanding (MOU) signed by Siemens (NYSE:SI) (Munich, Germany), Huaneng Power International (NYSE:HNP) (Beijing, China) and Shanghai Electric Group (OTC:SIELF) (Shanghai, China) to strengthen their long-term cooperation in most advanced energy technologies.

The agreement was announced as German chancellor Angela Merkel met with China President Xi Jinping in Berlin.

Siemens President and Chief Executive Officer Joe Kaeser said the strategic agreement with Huaneng Power is a step that further underlines their relationship. "Together with our strategic partner Shanghai Electric, we are looking forward to elevating our cooperation with Huaneng to a new level," he said.

Days earlier, Kaeser had come under criticism from the German government for paying a visit to Russia President Vladimir Putin in Moscow to discuss high speed rail and energy projects at a time when the U.S. was leading the campaign with the EU to impose sanctions on Russia following that country's speedy annexation of Crimea. Kaeser defended his right to follow the trade route.

In 2013, the EU was Russia's top trading partner, with gas and oil figuring largely in the total of $366 billion. Trade with the U.S. stood at $25.8 billion. China was Germany's third-largest trading partner in 2013, with $192 billion in turnover between the two countries.

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