The new division in China will focus on research activities concerning energy and the environment, automation, transportation in megacities, public and private infrastructure and health care.

"China plays a more and more important role in Siemens global strategy.... We need to be present here, grab the trends and work with local institutions to provide products and solutions based on these trends," Hausmann said.

Siemens employs 47,000 researchers worldwide, accounting for more than 10 percent of its staff. About two-thirds of their projects concern automation, energy, transportation, medical care, information and telecommunications, lighting and household appliances.

"A lot more of our business entities want Chinese people to do basic research because they want the products to fit the Chinese market," said Hermann Requardt, head of Siemens Corporate Technology which administers seven divisions worldwide.

During 2005 fiscal year, Siemens poured 5.2 billion euros, about seven percent of its total revenue, into research and development.

Calling China business "the locomotive of Siemens worldwide", Hausmann said that Siemens China would strive for sustained growth by strengthening local procurement and research and development and expanding local offices through mergers and acquisitions.

The company has beaten off fierce competition to win contracts for public utilities for the 2008 Beijing Summer Olympic Games, including the Tianjin Olympic Central Stadium, the Beijing National Aquatics Center, the 140-kilometer Beijing-Tianjin high-speed rail link and the expansion of Beijing Capital International Airport.

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