China eyes high-speed rail deals with 28 nations

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CNR Corp is in talks with 28 countries, including the US, Russia and Brazil, about high-speed rail projects, said executive of the Chinese trainmaker on Wednesday.

Yu Weiping, vice president of CNR, said the merger of the country’s top two trainmakers will further strengthen its competitiveness in the global market.

Yu revealed that the CNR is in discussions with countries about new railway projects. The company scored a 68.6 percent year-on-year increase in export in 2014, totaling $3 billion.

However, cost performance, trade barriers, financing cost and working permits hurt its global drive, according to the company. The CNR has a successful bid rate of 50 to 60 percent.

The CNR and CSR announced their plan to merger in December to become the world’s largest trainmaker. Shareholders will vote on the move on March 9.

The merger is to “improve the scale of operations, increase profitability and construct a large, comprehensive, world-leading industrial group centered on rail-transportation equipment with multinational operations,” CSR and CNR said in a joint statement on Jan 20.

China’s railway equipment exports accounted for 10 percent of global market share in 2014, said Wang Xiaotao, vice minister of the National Development and Reform Commission, on Feb 6.

Total exports of railway equipment hit $4 billion in 2014 and major markets include Asia, South Africa and Latin America, said Wang at a press conference.

“There is a global enthusiasm for infrastructure projects, particularly railway building, both in developed and developing countries, providing a good opportunity for China’s railway firms to go global,” added Wang.

Dai Tian contributed to this story.

Related story: China turns to rail , nuclear to energize exports, by Zhao Yinan, China Daily

China will lift sluggish exports by promoting rail, nuclear power and surplus products in overseas markets after trade growth fell short of its target last year.

The exploration of overseas markets for railways, nuclear power and other sectors involving the use of large-scale equipment will be upgraded through joint-ventures and public-private partnerships, top members of the State Council decided on Wednesday. Premier Li Keqiang presided over the executive meeting.

Industrial resources in those sectors should be integrated, according to a statement released after the meeting. The decision was in line with the ongoing merger of the country’s top two train makers, hinting that a similar overhaul in related industries could be possible.

Industries with overcapacity, including steel, nonferrous smelting, building materials and textiles, are also included in China’s latest plan to reach out to overseas markets, the statement said.

The statement said the plan will become another engine to drive the country’s exports and help with needed upgrading of domestic industries.

China has relied heavily on the export of large-scale equipment, such as railways and nuclear power facilities, to boost trade after missing its growth target for the third consecutive year.

The country’s foreign trade rose by 3.4 percent last year, far behind its target of 7 percent. Exports grew by 4.9 percent last year to 14.4 trillion yuan ($2.32 trillion), and the surplus widened to 2.35 trillion yuan.

In its latest move, China CNR Corp, a leading manufacturer of locomotives in China, announced an export contract for subway trains with the United States on Jan 27. It was the first foray into the US rail transit market, Xinhua News Agency reported.

The manufacturer will sell 284 subway trains worth 4.12 billion yuan to equip Red and Orange subway lines in Boston, the announcement said.

Wang Mengshu, an academic at the Chinese Academy of Engineering who specializes in rail and infrastructure projects, said China boasts the longest rail lines in the world-proof of its technological success-and Chinese rail companies’ prices are more competitive than Japanese and German companies.

“Railway exports invigorate the whole industrial chain, including the manufacturing of locomotives, parts and signals,” he said.

Chinese companies are more competitive since they are able to offer a whole package of services, including infrastructure construction, locomotive manufacturing, maintenance and professional training, Wang said.

Wednesday’s executive meeting also brought a decision to build more business incubators to provide logistics, legal and accounting services for startup companies.

It asked local governments to streamline the administrative procedures for small and micro companies, and to provide offices at low cost or subsidize their rent, Internet and other fixed expenses.

The meeting pledged to use government-backed funds and tax exemptions to support early-stage scientific and technological companies, which often face difficulties in borrowing capital because of their lack of tangible assets.

Angel investors, crowd funding, a regional stock exchange market and intellectual property mortgages will also be encouraged to support startup businesses.

 

Source : China Daily | February 11, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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