China Daily reports Caterpillar and China Energy Investment Corp signed a five-year strategic cooperative framework agreement in Beijing on Wednesday.
Earlier in the day, Commerce Secretary Wilbur Ross said $9 billion in deals involving 20 companies, including Caterpillar, were agreed upon during President Trump's current Asia trip.
The Caterpillar / China Energy deal outlines future collaboration for mining equipment sales and rentals, technology applications and product support provided by Caterpillar and its local dealers, Caterpillar said.
China Energy is a newly formed state-owned enterprise created by a merger between the China's major power generator, China Guodian Corp, and coal producer Shenhua Group. The cooperation builds on the relationship of almost two decades between Caterpillar and Shenhua Group.
Li Dong, a senior executive from China Energy, said, "The newly signed strategic agreement will further strengthen and expand our partnerships, and create value to further support our globalization endeavors."
Qihua Chen, vice-president of Caterpillar and chairman of Caterpillar China, said the two sides will "jointly promote the sustainable transformation of the coal industry in China."
Caterpillar said it will export mining products from the U.S. to China Energy for upcoming mining projects. Cat already has a relationship with China Energy supporting the company through its global dealership network. In recent financial reports, Asia sales have lead Cat's revenues.
“Asia Pacific saw strength across the region,” Chief Financial Officer Bradley Halverson told analysts on the earnings call, according to a FactSet transcript.
“However, China continues to be a bright spot and a surprise to the upside. Our current estimate for 2017 is for the 10-ton-and-above excavator industry in China to more than double versus last year, which would result in sales that are higher than our estimate of normal replacement demand for the region.”
Ross said any pending deals will have to go through a national-security review process and that more details will be released later. Bloomberg.com reports that many of the deals are expected to be in the form of nonbinding memorandums of understanding, not contracts.