China was once a massive importer of rail technology. But now, it is striving to become the world’s go-to provider of high-speed rail, with proposals for lines across the world.
Chinese Premier Li Keqiang has emerged as the country’s top salesman for what Beijing dubbed “The New Silk Road”. In Bangkok recently, Mr Li proposed a high-speed line linking China, Thailand and Singapore. He has also pitched for business in Britain, Russia, India and Africa.
Now, China is reportedly planning to tender again for Mexico’s US$4.4 billion high-speed rail project. Mexican regulators abruptly cancelled its win last year amid heated debate over the bidding process. This time around, analysts said Beijing’s odds look even better.
Mr Victor Gao, director of the China National Association of International Studies, said: “If we only look at the merits of the bidding and the qualifications, rather than be distracted by ideological or political considerations, the Chinese company stands a very good chance.”
Now that China’s two largest rail companies – CNR Corp and China CSR – have agreed to merge, experts said that leading rail suppliers such as Siemens and Bombardier will have to double down to protect their market share.
“China now has already accumulated so much capacity and so much technical know-how to build a railway system in China that such division by the two companies no longer serves any commercial purpose,” said Mr Gao. “This vicious cycle of competition between the two companies is not healthy, not only in the Chinese market, but also globally when they look for other assignments in other parts of the world.”
China’s relatively cheap technology certainly helps – it has had more success bidding for projects in developing economies in South America and Africa, where easy financing packages are part of the lure. Nonetheless, China did also win a multimillion-dollar contract to supply cars to Boston’s subway system, the first such deal for a Chinese firm.
Mr Gerald Ollivier, a senior infrastructure specialist at the World Bank, said: “In a way, Beijing believes in the high-speed rail in the sense that while it does work well so far in the Chinese context, it is also an opportunity to create linkages with other countries in the way that creates opportunities for integration, cooperation.
“It is also quite an effective way for China to help advance some of the very advanced technology that they have developed and provide them to the rest of the world.”
Even as China is busy vying for overseas rail projects, it is also pressing on with a staggering expansion of its network in China. By the end of this year, its high-speed rail line is expected to reach 18,000 kilometres, nearly double what it had just two years ago.
Source : Channel News Asia | January 16, 2015