Siemens and Rongxin Power Electronic Co., Ltd (RXPE), a power electronic equipment manufacturer in China, signed an agreement on Thursday to build a joint venture (JV) to better service the power transmission market in the Chinese mainland, according to reports.

The investment amount by both sides has not been disclosed.

''The upcoming JV will help the two parties to communicate and improve the technology used in Flexible AC Transmission System (FACTS), and help Siemens make up plans more suitable for China,'' said Xiao Song, a senior official from Siemens China.

Siemens deems China to have the world's second largest power grid, and believes FACTS has a greatly potential market in the country, reported Siemens.

A flexible alternating current transmission system (FACTS) is a system composed of static equipment used for the AC transmission of electrical energy. It is meant to enhance controllability and increase power-transfering capability for networks.