CSR Qishuyan Locomotive and Rolling Stock Co Ltd, a subsidiary of China South Locomotive and Rolling Stock Industry Corp, signed a supplementary letter of intent with General Electric (China) Ltd recently to jointly set up a diesel engine company.

Under the agreement, the two sides will invest about $90 million with 50-50 joint ventures that will be engaged in the production, assembly, testing and sales of diesel engines for vehicles, maintenance services, as well as processing parts and components for diesel engines.

The new venture will eventually have an annual production capacity of 650 diesel engines.