Caterpillar Hitching a Ride to China: Report

SHANGHAI (TheStreet) -- Caterpillar (CAT Quote) is striving to tap the $22 billion Chinese heavy-truck market.

The company, along with Navistar(NAV Quote), has entered negotiations with the Shanghai-based car maker Jianghuai Automobile to launch a manufacturing joint venture in China, according to a report by Reuters, which cited an anonymous source.

German truck and heavy-equipment giants Daimler (DAI Quote) and MAN have already struck similar deals with Chinese partners.

Talks between the tree parties are well along, Reuters reported. According to the newswire's source, Caterpillar and Navistar would take one half of joint company and Jianghuai the other. The venture would produce heavy trucks and their engines.

Caterpillar shares were trading Friday at $46.97, up $1.47, or 3.2%, boosted by a broader market rally on upbeat economic data and some encouraging words from Fed Chairman Ben Bernanke about the prospects of economic recovery.

Navistar shares, meanwhile, gained 91 cents, or 2%, to $45.37.

-- Written by Scott Eden in New York