Aug. 19 (Bloomberg) -- Siemens AG forecasts sales of its power transmission unit in China will increase by as much as 20 percent in the next few years as China upgrades its power grip to cope with electricity shortages, the Asian Wall Street Journal reported, citing Jurgen Keese, China manager for the unit.

Siemens plans to spend up to 100 million euros ($123 million) to expand factories and joint ventures in China, Keese was quoted as saying. The Munich-based company will invest 40 million euros in a transformer venture this year. The Chinese partner and location of the venture weren't disclosed.

Sales from the transmission unit in the financial year ended last Sept. 30, were 4.1 billion euros, accounting for 14 percent of Siemens sales in China, the newspaper said.

Siemens said last month it was teaming up with Shanghai Electric (Group) Corp. to bid for a project to supply 16 gas turbine generators to power producers in China. Siemens, which had invested more than 655 million euros in China as of last month, employs 21,000 in China, with businesses ranging from power equipment to mobile-phone networks and the world's first commercial train using magnetic propulsion.

(Asian Wall Street Journal Web site, 8-19)

To contact the reporter on this story: Sue Hill at shill6@bloomberg.net

Last Updated: August 18, 2004 20:05 EDT