Caterpillar Inc. Friday said its China-based subsidiaries have teamed up with a Shanghai industrial park developer to expand the heavy machinery maker's presence in that country, sending its shares higher.

Caterpillar (CAT) stock rose nearly 3 percent and helped drive up the blue-chip Dow Jones industrial average.

The company said the subsidiaries have signed three nonbinding memoranda of understanding with the developer.

The subsidiaries will partner with the Lingang Industrial Area (search) to establish a regulatory system for trade, establish the area as the main remanufacturing center for Caterpillar machines, and set up a service center.

"These initiatives are tangible examples of our plans for future growth across all lines of Caterpillar's business in China," Chief Executive Jim Owens said in a statement.

Caterpillar, which first opened an office in China in 1978, has its marketing headquarters in Beijing.

The company's shares were up $1.53 to $54.68 in mid-morning New York Stock Exchange trade.