China wants to lessen its reliance on Western power technology

Siemens is to enter a joint venture with Shanghai Electric which will see it invest 55m euros ($71m; �38m) in supplying parts for new gas turbines.

China's booming economy has placed severe demands on the country's energy supply, and Beijing is keen to end its dependence on foreign technology.

The firms will build turbines worth 210m euros for Chinese power plants.

Technology transfer

State-owned Shanghai Electric is China's biggest industrial equipment manufacturer.

"Siemens will transfer core technologies to this joint venture and that will help us localise the manufacturing of advanced equipment," the company's chairman Wang Chengming told the Shanghai Daily newspaper.

"That will also alleviate Chinese companies dependency on importing advanced power generation equipment."

The German company said the deal would allow it to transfer much-needed technology to China and enhance its competitive position in the market.

Power demand

"It is urgently necessary to accelerate the construction of new power plants to meet the demand of electricity in China," Ernst Behrens, president of Siemens' Chinese operations, told the newspaper.

Siemens will hold a 51% stake in the joint venture, Shanghai Electric owning the remainder of the business.

China's generating capacity has struggled to keep pace with burgeoning energy demand in recent years.

The country suffered widespread power shortages this summer while 23 of China's 310 provinces were forced to ration power last year.