China signs landmark energy deal with India

China’s Shanghai Electric Group (601727.SH, 2727.HK) signed a US$10 billion deal to sell energy production equipment to India’s Reliance ADA Group, the Wall Street Journal reported. Under the terms of the contract, the Indian firm will import 42 coal-fired thermal-generation turbines from China. The move establishes Chinese energy firms as a new competitive threat to longstanding power-producing equipment providers in the US and Europe, notably Siemens (SI.NYSE, SIE.FWB), GE (GE.NYSE) and Alstom (ALO.Euronext). The massive deal is in stark contrast to the US$750 million gas turbine equipment deal GE signed with Reliance last week. GE dominates about 40% of the global gas turbine equipment production market. According to a division president of Shanghai Electric, the company has nearly four times the manufacturing capacity in power-generation equipment as Siemens, GE and Alstom. Siemens owns a 40% stake in a joint venture firm with Shanghai Electric, and the two share some technology.