Acquiring knowledge, building strength

That helped it develop its own version of a high-efficiency switch called an insulated-gate bipolar transistor, a key transport industry component.

Zhuzhou CSR Times Electric was part of railway equipment manufacturer CSR Corp, which merged with another manufacturer, CNR Corp, in June, to create CRRC Corp, and had imported these switches from leading international suppliers in Europe and Japan for many years.

Paul Taylor, CEO of Dynex, said the acquisition has greatly helped his team increase its R&D capabilities through financial support, technology sharing and assistance with commercialization. The investment has enabled Dynex to build a new R&D center, which opened in 2012. Dynex's R&D staff has grown from 12 before the acquisition to 55.

More recently, Zhuzhou CSR Times Electric has set up a team of about 10 people to conduct research and development on the drivetrain sub-assemblies of electric vehicles, which is based at Dynex's R&D center.

The new team will look into how the semiconductor switching technology they developed for trains can be applied to electric cars, hoping to develop a technology that can be sold to carmakers.

Another case of synergy is Chongqing Machinery & Electric Co's acquisition of Precision Technologies Group in 2010. Neil Jones, group business development director at Precision Technologies, said the Chongqing company has demonstrated its regard for research and development by allowing it to invest 12 percent to 15 percent of revenue in R&D.

"Chongqing Machinery & Electric has realized that R&D is at the heart of what we do today and for the future," he said.

Often, R&D is crucial for a Chinese company to reap all the benefits of an acquisition, as shown by automotive manufacturer SAIC Motor Corp Ltd, which bought technology relating to the Rover 75 and Rover 25 models after the UK carmaker MG Rover collapsed in 2005.

To help SAIC fully integrate MG Rover's intellectual property into its own cars, the UK-based consulting firm Ricardo Group offered to provide an R&D center in Britain to train SAIC's engineers.

The center, in the English Midlands, employed about 200 engineers, many of whom were former MG Rover employees. It was later integrated into SAIC's UK operations.

Mark Garrett, chief operating officer of Ricardo Group, said his company's help in setting up the R&D center enabled the intellectual property that SAIC had bought from MG Rover to be applied quickly to create new products, such as the Roewe 550.