Manufacturing might

China has the manufacturing muscle to build the track and trains and is exporting that technology globally. CRRC Corp Ltd, a state-owned enterprise, became the largest train maker in the world in June after a merger between CNR and CSR. CRRC has projects in more than 100 countries and regions.

As President Xi Jinping continues his state visit to the United Kingdom this week, British officials are soliciting bids for an $18 billion HS2 link between London and northern English cities.

CRRC will be competing with other world giants such as Germany's Siemens, Japan's Hitachi and France's Alstom.

Six years after the US transportation department report, there are signs of progress. In January, California broke ground on a $68 billion HSR network to connect San Francisco and Los Angeles by 2029 and eventually go from Sacramento to San Diego, totaling 800 miles with up to 24 stations. The line's top speed will be 220 mph.

On Sept 30, the California High-Speed Rail Authority (CHSRA) announced that it had received 36 responses from private companies interested in financing, building and operating the first 300-mile segment.

"Until now we have been saying 'There will be private-sector interest.' Now the private sector is saying 'There will be private-sector interest,'" CHSRA CEO Jeff Morales said on Oct 2.

Lisa Alley, CHSRA chief of communications, told China Daily, that interviews are being held with companies that responded, all of which she said have completed high-speed rail and other major projects all over the world. She said the companies confirmed key parts of the authority's 2014 business plan relating to leveraging the private sector to develop and operate the project and drive down costs.

"It is important to differentiate between private-sector financing for construction and maintenance of the system, which would be repaid subject to the private party maintaining a high-level of performance versus private-sector investment based on the ridership and revenue to be generated by a long-term concession for the operation of the system," Alley said.

About $13.2 billion of the $68 billion has been provided by state and federal sources, plus a pledge of California's cap-and-trade proceeds, funds paid by companies to offset carbon emissions, Reuters reported.

Environmental concerns are paramount in California.

In a January 2014 op-ed page article in the Los Angeles Times, Brian P. Kelly, California secretary of Transportation, and Mary D. Nichols, chairman of the California Air Resources Board wrote: "By 2040, it (HSR) could reduce car miles traveled in the state by 3.6 billion miles a year, the equivalent of taking 317,000 cars off the road daily. And by 2020, the project is estimated to eliminate between 278,000 and 674,000 net metric tons of greenhouse gases from voluntary emissions reductions, electrification of local rail and other efforts."

The Chinese High-Speed Rail Delivery Team was one of the 36 groups expressing interest in California's plans.

China looks to deliver

Led by China Railway International, the Chinese team said it could provide design, construction, equipment-procurement and rolling stock (trains). It also proposed financing from the Export-Import Bank of China.

The team said that packaging large pieces of the high-speed rail line together by a single contractor would cut the project's cost and construction timeline.

"To the Chinese team, a relatively large-scale contract is proper and reasonable," said the letter, obtained by Reuters via a Public Records Act request.

The Chinese proposed that under "appropriate loan conditions" the Export-Import Bank of China could "satisfy the financing needs of the project".

But the Chinese also cautioned that California should provide more public financing and guarantee future project debt to satisfy investors, Reuters reported.

"Due to the huge financing gap of the project, potential private investors and lenders may be cautious," the Chinese team wrote.

The California authority is expected to seek bids by mid-2016.

"Of course Chinese companies will be actively involved in the bidding process once it has started," Zhang Yong, deputy director of public affairs at CRRC, told China Daily.

"The US has a need for HSR. We believe that one day all the major cities in the US will be connected by high-speed rail.

"CRRC wants to build a win-win relationship with the US, integrate into American society and provide the country with more advanced railway equipment," Zhang said.

Zhao Jian, a professor at the School of Economics and Management at Beijing Jiaotong University, sees high-speed rail endeavors in the US as too costly and risky for Chinese companies.

"If American governments pay for the high-speed rail project, Chinese companies should get involved," Zhao told China Daily. "Our prices for train manufacture and rail construction are very competitive, better than Japan, Germany, France, and so on.

Zhao said "however, if China wants to invest in high-speed rail projects in the US and earn money based solely on ridership and revenue, it's impossible," he said. "High-speed rail projects in the US will not be profitable.

Zhao also wondered about demand.

"America does not have a market for high-speed rail," he said. "To be profitable, the cities connected by the HSR must have a very large and dense population. The cities in the US are too spread out, and the population is far from enough,"Zhao said. "Currently, the passenger trains in the US are losing money, while only cargo trains are profitable. There are no cargo trains on HSR.

Zhao also questioned whether there was demand.

"There is almost no place in the world that has a market for high-speed rail," he said. "In Europe, the governments want to do it, and they subsidize it.