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Toh Han Shih

China is close to selling sophisticated high-speed trains to the United States and Britain, a move that will burnish the country's reputation for manufacturing prowess.
 Mainland rail companies including China South Locomotive & Rolling Stock Corp (CSR) are in advanced talks to sell rolling stock in deals potentially worth billions of yuan over the coming years.
 Long derided for producing low-technology products such as toys and clothes, China wants to establish itself as a maker and exporter of trains, planes and motor vehicles.
In 2005, then commerce minister Bo Xilai said the nation would need to export 800 million T-shirts to Europe to buy an Airbus 380 jet from Europe.
 Bombardier Sifang Transportation, a joint venture between CSR and Canada's Bombardier, is a front runner to supply trains to the first US high-speed passenger train service, Desert Xpress.  
Last month, Bombardier Sifang was awarded a 27.4 billion yuan (HK$31.1 billion) contract by the  Ministry of Railways to supply high-speed trains on the mainland. The nation's high-speed rail network is expected to be the world's biggest within a few years.
The 302-kilometre Desert Xpress from Victorville, California, to Las Vegas, Nevada, will start operation in four years. A decision on the supply of trains would be made early next year, Desert Xpress president Thomas Stone told the China Railway Innovation Summit in Beijing this month.
 Desert Xpress is in talks with the Ministry of Railways and  mainland railway firms on how they can participate in the project, which will cost US$3.5 billion to US$4 billion.
'China has done a highly reliable job in producing safe rolling stock and is a stronger competitor to be our partner,' said Stone. 'China is in a strong position in high-speed rail, not just in the US, but in many other countries.'
The US, like China, was using high-speed rail projects to stimulate the economy, said Stone. Washington had set aside US$8 billion for high-speed rail projects in 10 travel corridors, plus a further US$4 billion to US$10 billion to be spent over the next five years, he added.
'President Barack Obama has adopted a goal to implement high-speed rail in the US,'  he said. 
David Shipley, the managing director of British railway advisory firm CSRE, said Europe was on the verge of introducing mainland-built trains.
 Ironically, China's train manufacturers originally gained their technological know-how from forming joint ventures with European firms such as Alstom and Siemens.
'It is just a matter of time before Chinese companies sell trains to developed Europe,' said Jiong Shao, Nomura International's head of China industrials equity research. 'A few years ago, Huawei Technologies (a Chinese telecommunications equipment provider) could only sell to emerging markets. Now, Huawei's telecommunications equipment is sold in many developed European countries.'
 Early next month,  executives from CSR Nanjing Puzhen Rolling Stock, a CSR subsidiary, will visit Britain to pursue several potential rail deals that could eventually be worth ?00 million (HK$6.36 billion).  
CSR is seeking to sell 12 prototype diesel carriages with a maximum speed of 160 km/h for use by a British train operator. If the operator was satisfied with these, it would place a follow-on order for more train units in 2012 and beyond, said Shipley.
Another opportunity involves the possible sale of eight high-speed trains with a maximum speed of 225 km/h by CSR to a private British operator.  
That would place CSR in a strong position to win orders to supply about 750 cars by 2020 to replace ageing British trains, said Shipley. The total value of such orders could be ?50 million, offering CSR potential income from Britain over the next decade of more than ? billion.
CSRE is working on other possible deals in Britain worth about ?00 million on behalf of CSR and China CNR Corp, another leading  rolling stock manufacturer.
'China should stop thinking about exporting shoes, and start thinking about exporting its high-speed technology, which is a big business,' said Kao Tsung-chung, a former vice-president of Taiwan High Speed Rail Corp.
 Mainland exports of mainly low-end goods such as shoes and clothes to Europe have been hit by anti-dumping measures and restrictive quotas. Its move into more sophisticated product could also face opposition.
'Chinese train manufacturers are seen as a threat to Europe,' said Shipley. 'There is a strong lobby among European train manufacturers that would like Chinese train manufacturers not to enter the European market. To get around this, we should maximise localisation of production in Europe, softening the blow of Chinese imports.'
For example, Chinese factories could perform labour-intensive tasks on the trains, while the higher value-added work could be done in Europe, he said.
Shao said CSR's move into Britain was not the first entry into developed Europe by a mainland firm, but part of a broader trend of Chinese companies on the global stage. 'Of course, we don't want Chinese companies to kid themselves, as they still have a long way to go,' he said.
Mainland railway companies also stand a chance of winning deals from Southeast Asia after Thai Prime Minister Abhisit Vejjajiva's visit to the country next month. 
However, there are still questions over product quality. 
'Chinese companies have been very aggressive in wanting to participate in railways in Thailand, but it would be too soon to go for high-speed rail if we can't control the quality of products,' said a senior Thai rail official. 'We have been buying rail tracks and products from China. The quality is 50-50 high and low.'
On track
302km from Victorville to Las Vegas 
All new exclusive double track with no at-grade vehicle or pedestrian crossings 
Dedicated passenger-only service - no mixing with freight trains 
Two stations with no intermediate stops - express service 
Primary within or adjacent to the existing I-15 freeway right of way 
Maximum vertical grade of 4.5 per cent and minimum radius curves of 2,500 metres deliver a trip time of 84 minutes



Mainland set for train deals in US and Britain