China taps into US rail market

By Zhang Qi (China Daily)
Updated: 2010-12-08 11:22
Large Medium Small

Beijing - Chinese high-speed train producers have moved to take a bigger slice of the global pie as China's ambition to build the world's largest high-speed railway network has attracted more multinationals to cash in on the fast-growing market.

General Electric announced on Tuesday it signed an agreement with CSR Co Ltd, China's largest high-speed train manufacturer, to establish a 50-50 joint venture to manufacture high-speed trains in the United States using China's technology.

"The joint venture, with an investment of $50 million in the first stage, will be the first US manufacturer to supply high-speed rail passenger trains for the two proposed (high-speed rail) corridors in Florida and California," said GE Vice-Chairman John Rice.

He was appointed in November to oversee a new international business structure from Hong Kong, signaling GE's focus on overseas markets.

"We will also be interested in building high-speed railway lines beyond the US when it makes sense," said Rice.

The agreement was signed on the sidelines of the three-day Seventh World Congress on High Speed Rail, which opened on Tuesday in Beijing.

Yang Hao, a railway transport professor in Beijing Jiaotong University, said the two companies are using each others' advantages to enhance their performance.

"CSR has advanced high-speed rail passenger train technology at a competitive price, attracting GE to partner with it, while GE can help CSR enter the US market," he said.

China's latest fast train, the CRH380A, built by CSR, set a world record on Dec 3 by hitting 486.1 km an hour during a trial run on the Beijing-Shanghai High-Speed Railway - as fast as a jet cruising at slow speed.

French power engineering and train company Alstom SA also said on Tuesday at the congress it signed a long-term cooperation agreement with the Ministry of Railways to jointly develop rail markets in China and abroad.

The deal includes cooperation in developing rolling stock and signaling, Alstom said in a statement.

"With China's ambitious (high-speed rail) plan, Alstom sees it generates huge demand and provides many opportunities," said Alstom Chairman and CEO Patrick Kron. "This is a general framework. We will finalize partnership details in the next three months."

Alstom signed a memorandum of understanding with CNR Co Ltd, China's other high-speed train manufacturer, and Shanghai Electric Group in September to jointly develop new urban transit products.

China is operating a high-speed rail network with a combined length of 7,531 kilometers, the world's longest. By 2012 this figure will almost double to 13,000 km.

According to the government's blueprint, the network will serve more than 90 percent of the population by 2020, with a budgeted cost of 2 trillion yuan ($295 billion), and 16,000 km of the fastest newly built lines.

China Daily