China’s HSR“Go Global”Strategy Pays off

HSR Diplomacy

Recently， Chinese Prime Minister Li Keqiang invited leaders from 16 Central and Eastern European （CEE） nations to experience Chinese high-speed railway（HSR） firsthand on a trip from Suzhou to Shanghai. The invitation has been described as “Chinese high-speed railway diplomacy” by local media.

The train left Suzhou at 11：00 local time， arriving in Shanghai just 22 minutes later. The train ride is a show- case of China-CEE cooperation， which features not only high speeds but also comfort and reassurance， Li said during an annual China-CEE summit meeting in Suzhou.

The invitation came a day after China signed two separate deals with Hungary and Serbia on the construction and revamping of a rail link between the Serbian and Hungarian capitals.

Details of the two deals are not immediately available， but Li had pledged that construction work of the railway would be underway by the end of 2015 and be finished within two years.

The high-speed rail link could cut travel time between Budapest and Belgrade by more than half. Once complete， the railway will help create a fast lane for importing and exporting products between China and Europe.

"The railway not only connects Serbia with Hungary， it also links with the rail network in southern Europe，" Serbian Prime Minister Aleksandar Vucic said.

Bilateral trade between China and the 16 CEE countries reached over $60 in 2014 amid sluggish global economic growth， indicating tremendous trade and investment potential， Li said

China has actively sought to export its high-speed rail technology in recent years， with media referring to the premier as the countrys top railway salesman.

Undeniably， a sort of "high-speed rail diplomacy" has become an extra arm in the new Chinese governments foreign affairs.

During several overseas trips， Premier Li has not forgotten to take each opportunity to promote Chinas highspeed rail technologies， thus earning his nickname as its salesman-in-chief.

As an advocate of Chinese HSR， Premier Li actively champions the sec- tor while overseas， saying that Chinese HSR technology ensures cost effective projects without sacrificing quality.

Leapfrog Development

Obviously， China is trying a new approach to spread its reach： bullet high-speed railways.endprint

Over the past decade， China has made great efforts to cement itself as a global leader in the high-speed rail sector， building more than 10，000 miles of high-speed track within its borders —longer than the rest of the worlds network combined and enough to stretch from New York to Hawaii and back.

Over the period， the sector made huge strides in technologies and earned reputation in the international market.

Chinas high-speed railway network is expected to span 18，000 kilometers by the end of this year， building a solid foundation for an industry that can generate new market growth points during the nations 13th Five-Year Plan period（2016-20）.

Official data from China Railway Corp， the countrys railway service provider and planner， shows that China will add another 2，000 kilometers of highspeed railroad by the end of this year， the final year of the countrys 12th FiveYear Plan period （2011-15）.

This is part of the governments plan to put more than 8，000 kilometers of extra lines in both regular and fastspeed railway networks into operation.

The railway construction target was announced by Premier Li Keqiang in the Government Work Report earlier 2015. The report also said that by the end of 2015， all cities in China with a population of more than half a million will be connected by high-speed railways.

Meanwhile， the government also encouraged the sector to explore the global market.

Nowadays， the outstanding reputation of Chinas HSR sector not only shows the success of domestic innovation but also represents a shift from the export of mass produced "Made in China" products.

CNR， CSR Joins into a US$26bln Giant

China North Railway （CNR） and China South Railway （CSR） are industry pioneers， having developed faster， cheaper， cutting-edge services that have attracted worldwide attention.

The two giants signed overseas contracts worth more than 6 billion US dollars in 2014， up 60% year on year.

Earlier in 2015， CNR signed a contract for 284 subway trains， worth 4.1 billion Yuan， or 6.71 million US dollars， for Boston MBTAs red and orange subway lines， which marked the countrys first foray into the US rail transit market.

The trains are designed to travel at 102 kilometers per hour and up to 129，000 kilometers a year on regular maintenance for at least 30 years.

CNR will also set up a R&D base in the United States， which will create employment opportunities for the local market. In Australia， CNR also estab-lished a joint venture， its first such overseas partnership.endprint

CSR holds the rights to the majority of rail track hauling and steering technology， showing the company values innovation as much as manufacturing， according to Ding Rongjun， a senior mechanic with CSR.

On June 1， CNR and CSR merged into a new company， China Railway Rolling Stock Corporation （CRRC）， with a market value of 26 billion US dollars， in a bid to compete with the likes of Germanys Siemens and Canadas Bombardier for global rail deal.

The two companies demerged from the government in 2000 to promote competition and have profited from Chinas drive to connect the vast country by railway.

"The merger will unite our technology， management and market resources， thus promoting Chinas high-level manufacturing and HSR to the world，" said CSR president Zheng Changhong.

CNR president Cui Dianguo believed the merger would accelerate innovation and upgrade related industries， changing Chinas reputation from manufacturing to inventing.

According to the merger plan， the incorporated company would emphasize overseas industrial distribution and management in order to establish promising brand influence.

The Branding of Madein-China

The merger of CNR and CSR came as a part of a grand plan named "Made in China 2025"， which was unveiled in May with the intent of upgrading the manufacturing sector and making better use of the countrys most competitive manufacturing capacity， such as highspeed rail.

According to Cui Mingmo， head of the China Association for International Economic Cooperation， Chinese manufacturers now have a new mission： branding Made-in-China.

Advanced technology and sound support services are a solid platform for international branding， and the HSR sector is an important pioneer in branding Made-in-China， said Cui.

CRRC Corp is now the worlds largest supplier of rail transit equipment with the most complete product lines and leading technology. Recently， CRRC Corp clinched a deal to help build a high-speed link from Los Angeles to Las Vegas.

"Anyone on earth who wants to buy rail transit equipment would be considered unprofessional if he did not come to consult CRRC，" said Shen Jiajun， a CRRC economist： "This is the significance of brand."

Shen advised Chinese manufacturers to focus on sharpening their edge in technology and services first instead of investing in ephemeral ideas such as advertising， as quality talks louder than adverts in the manufacturing sector.endprint

Since August， the government has been actively encouraging mergers of listed companies to optimize the industrial structure and raise their market value. Since CSR and CNR integrated and became a global industrial giant， four leading shipping companies are considering a merger and reorganization.

"Improving the quality of products is not enough to impress international customers，" said Tang Xiuguo， President of Sany Group： "You have to offer more than that， including after-sales services， operational and management training and corporate social responsibility projects.

Some manufacturers still rely on exporters to promote their products overseas without any after-sales services such as maintenance； Its just like selling disposal chopsticks， presenting no longterm value， according to Tang.

"We believe that quality changes the world and the best branding is your own hard work in developing and manufacturing high quality products and providing customers with all-round， efficient services，" Tang added

Since June， Chinese companies have struck high-speed rail deals in countries including the US， Russia and India， as well as the UK.

Chinas HSR is going global， thanks， in part， to President Xi Jinpings One Belt and One Road Initiative.

One Belt & One Road

At last years APEC Summit in Beijing， Xi said that only when there is a road， can people and things flow in a clear reference to the importance of transportation in the Belt and Road Initiative. Chinas advances in high-speed rail technology ensure an unprecedented level of inter-connectivity between China and the rest of the world.

The booming sector will in turn help make Chinas Belt and Road Initiative a reality， as transportation is the key to connecting the nations along the economic belt.

The development of the countrys high speed rail sector， which has expanded abroad， is central to the countrys monumental trade route projects.

"The high-speed railway of China can facilitate the One Belt One Road strategy through three aspects. Firstly， it will help form the infrastructure to promote the goods and passenger flows between China and Asian countries. Second， it will release the cargo capacity of conventional lines， so as to establish an advanced logistic system. The last is to help the export of Chinese high-speed railway products and to deepening the economic cooperation between China and other countries，" Li Hongchang， associate professor of Beijing Jiaotong University， said.endprint

China， whose economy has cooled to its slowest pace in six years， is clearly keen to capitalize on the economic benefits of building high-speed rail lines abroad.

According to the China Times， a Taiwan-based newspaper， Chinas railway industry is engaged in infrastructure negotiations with 30 countries， with investments in high-speed rail projects projected set to reach 470 billion US dollars.

These developments are important， particularly with regard to the Los Angeles-to-Las Vegas contract.

"America has never accepted any such large and high-tech infrastructure from a developing country before，" said Gary Wong， infrastructure analysts of Guotai Junan， one of Chinas largest investment companies.

A major advantage for China is that the cost of its high-speed rail projects are one-third lower than in other countries， according to a World Bank report. It has achieved a "remarkable feat" of building more track than any other country in the world combined but at a lower cost， according to Gerald Ollivier， a World Bank senior transport specialist.

Low costs might be a decisive factor in many large-scale HSR contract negotiations， but long-term safety is also a vital consideration， and this is an area in which China might lose ground to its competitors. While many European and Japanese high-speed systems boast spotless safety records， a horrifying train collision in Wenzhou in Zhejiang province in 2011， causing 40 deaths and hundreds of injuries， is a black mark on Chinas HSR reputation.

In a generally glowing World Bank report on Chinas method of highspeed construction， the authors noted that the deadly crash was attributed to"inadequate testing of a new design of signalling equipment， which lacked proper fail-safe features".

Chinas high-speed railway technology has made huge strides since then. The countrys HSR now boasts the advantages of stability， good riding quality， safety， reliability， compatibility， large capacity and passenger convenience.

"There is no similar technology in the world so far. This demonstrates Chinas world-leading capability in system integration，" Tao Guidong， deputy director of tech. center， CRRC Qingdao Sifang Co.， said.

With HSR technologies like permanent magnet synchronous hauling systems and 8-inch IGBT chips now been tested on real locomotives， Chinas position as the leader in the HSR sector is only expected to be cemented further.endprint