China should solve the politics to export high-speed rail technology

There is no doubt about China’s expertise, but success also involves studying the legal and political environments of host countries before rushing into a deal

PUBLISHED : Tuesday, 21 June, 2016, 11:20pm
UPDATED : Tuesday, 21 June, 2016, 11:20pm

High-speed trains are fast, efficient, cost-effective on middle distances and environmentally friendly. Those are the main reasons China has built the world’s largest network of more than 19,000km of track and is eager to export its technology and expertise. More than two dozen countries have shown interest, but only a few contracts have been signed. The reason is simple enough: even the best of ideas need to be backed by understanding and preparation.

US firm ends links with Chinese company helping it build high-speed rail link from Las Vegas to Los Angeles

Those would seem to have been lacking by both the Chinese and American partners in plans for a line from Los Angeles to Las Vegas. The announcement of the project on the eve of President Xi Jinping’s (習近平 ) visit to the US last September was seen as a major boost to China’s ambitions. No truly high-speed system operates in the country, so the deal offered prestige and an edge on European and Japanese competitors. Yet nine months later, China Railway International and XpressWest earlier this month disclosed the end of their alliance for conflicting reasons.

US regulations require that high-speed trains have to be made domestically, a difficult proposition given that no such industry exists. The project was estimated to cost at least US$5 billion and importing manufactured parts from China and assembling them in the US would have raised the cost. No federal help would have been available, so private funding was necessary. Financial disagreements and poor communications would also appear to have caused the scrapping of the pact.

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Differing priorities were behind the collapse of a deal between Chinese firms and Mexico in 2014, another with Indonesia has got off to a bumpy start and been delayed while Thailand said in March it did not want Chinese financing for a project. China lost out to Japan last December for India’s first high-speed line, although it is bidding for its second. But such setbacks will not slow dreams to finance, build and operate systems in every part of the world, particularly where the “One Belt, One Road” initiative is concerned. A line from western China through Central Asia to Europe and a pan-Asian one from Kunming to Singapore top that agenda. Bidding is under way for Southeast Asia’s first line, from Kuala Lumpur to Singapore. A win would add to the nation’s first overseas contract, signed last June to construct a line in Russia from Moscow to Kazan. There is no doubt about China’s expertise, but success also involves thoroughly studying the legal and political environments of host countries before rushing into a deal.