SHANGHAI Electric Group Co has strengthened its strategic partnership with Germany's Siemens AG with the launch of a new joint venture that will make power generation equipment, the two companies said yesterday.

Siemens is likely to pour further investment into Shanghai Electric in power equipment manufacturing projects, according to executives with the local firm.

Officials from both companies refused to disclose details of their strategic cooperation framework agreement, signed yesterday in Shanghai. The aim of their agreement is to make the company "a major manufacturing center for Siemens," according to Shanghai Electric.

"We would like to see Siemens step up investment as it has already shown a great interest in this regard," said Zhu Bin, vice president of Shanghai Electric's power generation group.

Shanghai Electric Power Generation Equipment Co, the newly created firm, represents a restructuring of existing businesses.

It absorbed all the businesses of three former joint ventures between Shanghai Electric and Siemens to further develop the ability to make power generation equipment.

The three companies, Shanghai Turbine Co Ltd, Shanghai Turbine Generator Co Ltd and Shanghai Power Equipment Co Ltd, were established in 1996. The combined output since then totals more than 100 million kilowatts of generating equipment, which is mostly used by Chinese power plants and accounting for about one-sixth of China's total installed capacity.

Combined sales of the three units last year was 13 billion yuan (US$167 million). The new company, controlled by Shanghai Electric, is expected to reach sales of 14 billion yuan this year.