The move came after Siemens China reported a record 15-percent increase in sales, which totaled 44.3 billion yuan for the 2005 fiscal year. The figure for the 2006 fiscal year which ended on Sept. 30 is to be released after a top management meeting on Wednesday.

"I can assure you it will be a happy meeting," president and chief executive Richard Hausmann told Xinhua on Tuesday.

Siemens will inject 80 million euros into the new research facility and expand its research staff to 300 in next three to five years.

"The market of China is very innovation demanding. I am personally convinced that China is making a transition from production-center to innovation-center," said Hausmann.

The Chinese researchers headed by Arding Hsu, vice president of Siemens China, would focus on innovations that suit emerging markets like China and have potential to move into the global market.

"Priorities will go to innovations that are simple, maintenance friendly, affordable, reliable and timely," Hsu said.

The latest company report says urbanization and the aging population will fundamentally influence the future of China and pose challenges in efficient utilization of scarce resources, environmental protection, affordable health care, mobility and the growing need for security.

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