German industrial conglomerate Siemens AG will continue to invest in research in China to build up an even stronger research presence as it boosts further localization by setting up a new regional headquarter in Shanghai, its global president and CEO Klaus Kleinfeld said.

In an interview following Saturday's announcement of a 710 million yuan (US$89.9 million) investment to construct the Siemens Centre Shanghai, Kleinfeld said the company is dedicated to investing 800 million yuan (US$101 million) in research and development next year in China.

Last week, the conglomerate unveiled Siemens China Corporate Technology, a new Beijing-based research facility, which will become one of Siemens' two largest research bases outside Germany. The move demonstrates the growing role China is playing in the company's research work.

"The structural foundation is very solid in China, and we have been using this year to make it more solid," Kleinfeld said.

Siemens China reported a record 15 percent increase in sales totalling 44.3 billion yuan (US$5.6 billion) for the 2005 fiscal year. The figure for 2006, which the company has said is very positive, will be released this week.

Siemens' business in China is rapidly growing as demand for their goods increases, Kleinfeld said.

"We have now 35,000 employees in China and 13,000 of them in Shanghai. That number speaks for itself," he said.

The CEO also said the company is committed to growing at a speed which is at least two times that of worldwide gross domestic product growth.

The company invested 5.2 billion euros (US$6.6 billion) into research and development in 2005, hiring 47,000 people working at research and development departments, including 30,000 soft engineers.

Siemens hosted a ceremony on Saturday celebrating the beginning of construction on a new regional east headquarters in Shanghai, which consists of four modern and high-tech buildings. The new complex covers businesses in Shanghai and neighbouring and nearby provinces such as Jiangsu, Jiangxi, Zhejiang, Anhui, Hunan and Hubei.

When completed in November 2008, the new building will provide office space for more than 2,000 employees, integrating departments of general management, administration, sales, marketing, research and development, service and training.

The move is seen as an effort to meet the demands of increasing business in the areas it covers and to lay the foundation for faster growing business in China and Asia.

"It's a good thing internally to have people work more closely together," Kleinfeld said. "It's an even better thing for our customers because we can with this bring much more forward the whole powers that Siemens has, with various competence and various offerings that we have in the portfolio."

"Siemens' Region East, including Shanghai and six neighbouring provinces, is of strategic importance for us," said Richard Hausmann, President and CEO of Siemens Limited China. "The new centre in Shanghai is to further consolidate our operations."

(China Daily November 7, 2006)