Bbf China Report Railway Market 0

FINAL REPORT

China Railway Market Study

In cooperation with: - Swiss Business Hub, China - June CUI, China

January, 2011

Osec Stampfenbachstrasse 85, Postfach 2407, CH-8021 Zürich, Telefon 0844 811 812, Fax 0844 811 813, [email protected], www.osec.ch

List of Content 1.

2.

3.

4.

5.

INTRODUCTION ...................................................................................... .4 1.1

Objective………..............................................................................4

1.2

Who We Are...................................................................................4

CHINA RAILWAY MARKET ...................................................................... 5 2.1

Overview……………………..…………………...……..….…..….…..5

2.2

Railway Operators in China…………………………………………5

2.3

Current Network, Mainlines and Regional Railways………....…….6

2.4

Heavy Haul Transport in China..……………………………………11

2.5

Highland Railway in China..…………………………………………11

HIGH SPEED RAILWAY ......................................................................... 12 3.1

Overview..……….……………………………...…………..………...12

3.2

History..…………………………………...….……….……….....…..12

3.3

Current HSR Expansion.....…………………………………………17

3.4

HSR Network and Construction Plans..……………………………19

3.5

HSR Service...…………………………...………………….………..27

3.6

Rolling Stock, Order and Delivery Timetables…………………….29

3.7

Track Technology.……………………….……..….…..….…......…..32

3.8

Maglev High Speed Rail.……………………….……………………32

3.9

The Fastest Trains in China…………………………………………33

MASS RAIL TRANSIT ............................................................................. 35 4.1

Overview……………………….…………….…….…………..……...35

4.2

Key Data of MRT Systems in China……………………….………35

MARKET PLAYERS ................................................................................ 38 5.1

Key Chinese Railway Enterprises…..………………………………38

5.2

Chinese Railway Academy, R&D Institutions and Universities.…42

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6.

7.

8.

MARKET ENTRY HURDLES .................................................................. 45 6.1

Intellectual Property…………………………………………………..45

6.2

Licenses and Certification ..…………………………………………46

6.3

Culture and Language…………………...……………………..……46

INSIGHTS FOR THE RAIL INDUSTRY. ................................................. 49 7.1

Impact of the Global Financial Crisis…….....................................49

7.2

Changes and Trends…………………………………………………49

7.3

Opportunities for Swiss Rail Industry………………….……………50

DISCLAIMER .......................................................................................... 53

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1. INTRODUCTION Global markets are shifting and the importance of the developing markets lies not only in their huge contribution to global growth, but also in their absolute importance. The last two years of the global financial recession have accelerated China’s relative importance and pushed it on the world scene. China as a developing economy must invest in infrastructure to ensure the bottleneck-free flow of passengers and goods. China has become one of the most tempting railway markets and is becoming a global leader in the rail industry. Swiss Business Hub (SBH) China is commissioned by OSEC Business Network Switzerland to conduct a special study on China railway market, especially for SwissRail Industry Association members. The study is accomplished by Mrs. June CUI of SBH China, the results of which are summarized in the following report.

1.1 Objective The railway supply market comprises all systems, subsystems, and components applied in conventional, high speed and urban rail systems, including infrastructure, rolling stock, rail control and the services required to install the systems and maintain the infrastructure and rolling stock. Since the largest change in the railway supply market was observed in the infrastructure segment followed by the rolling stock segment, and the main drivers are the mass orders for building Chinese very high speed railways (up to 350 km/h or higher), mainlines and urban metro networks, this study will mainly focus on the railway market in China. The objective of this study is to assist Swiss railway enterprises who are penetrating China railway market or developing their businesses in the market, by providing first-hand overall information of the market, which include mainline railway, high speed railway and urban public transportation systems. The study covers not only status quo of the market, but also detailed information of on-going railway projects, schedules and plans until 2020. It also illustrates among others, the special challenges and opportunities in the targeted market for the Swiss railway and rail-related exporters, especially the SMEs. A sound knowledge and understanding of China railway market is essential for companies to stay on track for continued successes. This market study intends to serve as a valuable source for decision-makers and stakeholders in the industry, which helps to decide on business activities by focusing on opportunities in the rail sector that will bring substantial and sustained growth.

1.2 Who We Are Swiss Business Hub China is the official representation for Swiss trade and inventment promotion in China. It has a team of nine members, with the main office installed in Embassy of Switzerland in Beijing and one branch office in the Consulate General in Shanghai and another one in the Consulate General in Guangzhou. Mrs. June CUI, who conducted the market research and produced the report, is the head of Swiss Business Hub Guangzhou Office. She has worked as the chief representative of Swiss trade and investment promotion in South China since Consulate General of Switzerland was established in Guangzhou. Railway industry is one of the sectors she is responsible for, among other obligations, in Swiss Business Hub China. Mrs. Cui was graduated from one of the famous railway universities in China – Central South University (former Changsha Railway University). She had worked in various functions in Chinese Ministry of Railways for over fifteen years. She has a good knowledge of the rail industry, and still maintains good connections with Chinese railway sector. Mrs. Cui is quite experienced in bridging the different cultures of the East and the West, which was built up through her long career path, including over eight years of working for Siemens before she joined Swiss Business Hub about five years ago. Contact for the market study: Mrs. June CUI, SBH China [email protected]; [email protected] SwissRail Industry Association, January 2011, China Railway Market Study

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2. CHINA RAILWAY MARKET 2.1 Overview China is a developing country with a huge population of 1.334 billion (end of 2009) and a vast territory of over 9.6 million km². Rail transport is the most commonly used mode of transportation especially for long haul services in the mainland China. China's railway transportation has long fallen short of demand. The increasing demand for railway transportation resulting from the fast and steady economic development, 2 digits GDP in the past decades and a much more above-average growth after the outburst of the global financial crisis following the US subprime crisis in 2008, has been a key factor that drives China to continue and to speed up its railway development and construction in China. The urbanization in China is proceeding faster than it has been realized. The United Nations has forecasted that China's population will have about an equal number of people staying in the rural and urban areas by 2015. It is estimated by Chinese Ministry of Housing and Urban-Rural Development that from 2010 to 2025, 300 million Chinese now living in rural areas will move into cities. By 2035, nearly 70% of the population will live in urban areas. The shortage of natural resources is one big challenge China has been facing, such as the limited land resource, especially in the regions with Beijing, Shanghai and Guangzhou as the economic powerhouses. The structure of energy resources in China is unbalanced with rich coal but limited petroleum. The conflict between the natural resources and economic development in China is getting more serious. The rising environmental awareness in China, similar to other emerging markets, is crucial for sustainable economic development in China. China has no other choice but to continue its endeavours in environment protection, certainly also as a responsible global citizen. Railway transportation features high capacity, high efficiency, low energy consumption and environmental friendliness, and is obviously the best solution for China. China has never stopped its efforts in building and developing railway in China, and the two main focuses are building more railways and raising the train speed. With the generous economic stimulus program of more than $586 billion (¥4 trillion) due to the historic financial crisis outburst in 2008, China started to accelerate dramatically its railway development and construction. The total length of operational rail network reached 91’000 km by the end of 2010. China plans to invest a total of more than $500 billion (¥3.5 trillion) in order to complete its national rail netwrok of over 120’000 km by the end of its 12th Five-Year Plan (2011-2015). China, with its ambitious plans and remarkable achievements in the railway sector, especially in the past five years, has entered the era of high speed railway. The average operational speed of high speed trains is 350 km/h. China aims to lead the world in high speed railway construction and has begun research and development on a new "super-speed" railway technology which will increase the average speed of trains to over 500 km/h. The expansion of HSR is apparently developing China into a leading source of high speed rail building technology. China has also started to head aggressively into the international railway market.

2.2 Railway Operators in China Chinese Railways or Sinorail as it is often called in English is the national railway operator in the mainland China, under the control of Chinese Ministry of Railways (MoR) which is part of the State Council of China. Almost all rail operations in China are handled by the MoR. The railway management in the national railway system consists of three major levels. They are the MoR, Railway Bureaus or Railway Group Companies and Railway Stations.

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There are sixteen Railway Bureaus and two Railway Group Companies under the MoR.                  

Beijing Railway Bureau Chengdu Railway Bureau Guangzhou Railway Group Co. Ltd. Harbin Railway Bureau Hohhot Railway Bureau Jinan Railway Bureau Kunming Railway Bureau Lanzhou Railway Bureau Nanchang Railway Bureau Nanning Railway Bureau Qinghai-Tibet Railway Group Co., Ltd. Shanghai Railway Bureau Shenyang Railway Bureau Taiyuan Railway Bureau Wulumuqi (Ürümqi) Railway Bureau Wuhan Railway Bureau Xi'an Railway Bureau Zhengzhou Railway Bureau

There are also some local railway lines operated by local state-owned railway companies in different provinces in China. The only private-owned railway line in mainland China is "Luoding Railway" in Guangdong Province.

2.3 Current Network, Mainlines & Regional Railways Trains run by Chinese Railways link almost every town and city in the mainland China. New high speed lines from 200 km/h up to 350 km/h high speed operation are constructed, and many conventional lines are also upgraded to 200 km/h operation. The total length of operating rail network in China is 86,000 km by the end of 2009, this figure reached 91’000 km by the end of 2010, according to the Minister of Railways Mr. Zhijun LIU at China’s National Railway Conference opened on Jan 4, 2011 in Beijing. This means, in 2010 alone, China accomplished approximately 5’000 km newly-built rail lines. At present, there are over 30’000 km rail lines under construction in China. China plans to have a basically complete rail netwrok of over 120’000 km by the end of its 12th Five-Year Plan (2011-2015), among which 16’448 km will be high speed lines and 50’000 km rail lines will be built in the western part of the country. By 2015, 50% of Chinese rail network should be dual lines and 60% electrified. China’s overall capacity of passenger transport should reach 3 billion persons and that of freight transport should reach 4.8 billion tons by then. th

China’s total investment on railways during the 12 Five-Year Plan is more than $500 billion (¥3.5 trillion), roughly $200 billion more than the investment of $300 billion (¥2.2 trillion) during the 11th Five Year Plan. This means a total of $100 annual investment during the next five years.

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2.3.1 Main Lines Rail is one of the principal means of transport in China. The Spring Festival Travel Season is the peak railway travel season of the year. During the three weeklong holidays in China, known as "Golden Week", demand for tickets increases dramatically due to many migrant workers returning home and others using the time to st st travel the country. The holidays are the week starting May 1 and October 1 and the week around Chinese New Year, also known as the “Chunyun” season. Even though the duration of the May holidays was shortened in 2009, the holiday traffic remained strong, with the record of 6.54 million passengers carried over the Chinese rail network on May 1, 2009.

The map of the railway network of all China as of March 2010 (including Taiwan as politically claimed).

North-South Directions a. Beijing-Harbin Corridor - Main Lines       

Jingqin Railway; Beijing-Qinhuangdao 京秦线 Jingshan Railway; Beijing-Shanhaiguan 京山线 Shenshan Railway; Shenyang-Shanhaiguan 沈山线 Qinshen Passenger Railway; Qinhuangdao-Shenyang 秦沈客运专线 Changda Railway; Changchun-Dalian 长大线 Changbin Railway; Changchun-Harbin 长滨线 Binzhou Railway; Harbin-Manzhouli 滨洲线

In passenger rail service, Jingshan Railway, Shenshan Railway, Changda Railway, Changchun-Shenyang Portion and Changbin Railway are collectively called Jingha Railway (Beijing-Harbin).

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- Secondary Lines and Branch Lines (Only those with passenger rail service are listed.)  Jingzhang Railway; Beijing-Datong 京张线  Jingtong Railway; Beijing-Tongliao 京通线  Jingcheng Railway; Beijing-Chengde 京承线  Chenglong Railway; Chengde-Longhua 承隆线  Jincheng Railway; Jinzhou-Chengde 锦承线  Weita Railway; Weizhangzi-Tashan 魏塔线  Jitong Railway; Jining-Tongliao 集通线  Yechi Railway; Yeboshou-Chifeng 叶赤线  Nanpiao Railway; Jinzhou-Nanpiao 南票线  Xinyi Railway; Xinlitun-Yixian 新义线  Gaoxin Railway; Gaotaishan-Xinlitun 高新线  Gouhai Railway;Goubangzi-Tangwangshan 沟海线  Yingkou Railway; Yingkou-Dashiqiao 营口线  Lushun Railway; Zhoushuizi-Lushun 旅顺线  Jinzhou Railway; Jinzhou-Chengzidan 金城线  Chengzhuang Railway; Chengzidan-Zhuanghe 城庄线

b. Coastal Corridor                    

Changda Railway; Changchun-Dalian 长大线, Shenyang-Dalian Portion(沈大段) Yanda Railway Ferry 烟大铁路轮渡 Lanyan Railway; Lancun-Yantai 蓝烟线 Jiaoxin Railway; Jiaozhou-Xinyi 胶新线 Xinchang Railway; Xinyi-Changxing 新长线 Xuanhang Railway Xuancheng-Hangzhou 宣杭线, Hangzhou-Changxing Portion(杭长段) Xiaoyong Railway; Xiaoshan-Ningbo 萧甬线 Yongtaiwen Railway; Ningbo-Taizhou-Wenzhou 甬台温线 (Under construction) Wenfu Railway; Wenzhou-Fuzhou 温福线 (Under construction) Fuxia Railway; Fuzhou-Xiamen 福厦线 (Not constructed yet) Yingxia Railway; Yingtan-Xiamen 鹰厦线, Zhangping-Xiamen Portion(漳厦段) Zhanglong Railway; Zhangping-Longyan 漳龙线 Meikan Railway; Meizhou-Kanshi 梅坎线 Guangmeishan Railway; Guangzhou-Meizhou-Shantou 广梅汕线 Meilong Railway; Meizhou-Shantou 梅隆线 Guangzhou-Sanshui Railway; Guangzhou-Sanshui 广三线 Sanmao Railway; Sanshui-Longhua 三茂线 Hechun-Maoming Railway; Hechun-Maoming 河茂线 Lizhan Railway; Litang-Zhanjiang 黎湛线 Hainan East Ring Intercity Rail 海南东环城际铁路

c. Beijing-Shanghai Corridor    

Jingshan Railway; Beijing-Shanhaiguan 京山线, Beijing-Tianjin Portion(京津段) Jingpu Railway; Tianjin-Pukou 津浦线 Huning Railway; Shanghai-Nanjing 沪宁线 Jinghu High Speed Railway; Beijing-Shanghai 京沪高速铁路 (Under construction)

Jingshan Railway Beijing-Tianjin Portion, Jingpu Railway and Huning Railway are collectively called Jinghu Railway (京沪线) in passenger rail service. SwissRail Industry Association, January 2011, China Railway Market Study

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d. Beijing-Kowloon Corridor 

Jingjiu Railway; Beijing-Kowloon 京九线 / 京九鐵路

Jingjiu Railway uses the same line as Guangmeishan Railway between Longchuan and Dongguan. It also uses the same line as Kowloon-Canton Railway (Guangshen between Dongguan and Kowloon. e. Beijing-Guangzhou Corridor 

Jingguang Railway; Beijing-Guangzhou 京广线

f. Datong-Zhanjiang Corridor      

Beitongpu Railway; Datong-Fenglingdu 北同蒲线 Taijiao Railway; Taiyuan-Jiaozuo 太焦线 Jiaoliu Railway; Jiaozuo-Liuzhou 焦柳线 Shichang Railway; Shimenxian-Changsha 石长线 Xianggui Railway; Hengyang-Pingxiang 湘桂线 Yuehai Railway; Guangdong-Haikou 粤海铁路

g. Baotou-Liuzhou directions

h. Lanzhou-Liuzhou directions  

Baocheng Railway; Baoji-Chengdu 宝成铁路 Chengkun Railway; Chengdu-Kunming 成昆铁路

i. Kowloon-Canton Railway  

Guangshen Railway; Guangzhou-Shenzhen 广深铁路 KCR East Rail 九广铁路东铁 (temporarily operated by MTR and described as MTR East Rail Line)

East-West Directions a. Beijing-Lhasa directions     

Fengsha Railway; Fengtai-Shacheng 丰沙铁路 Jingbao Railway; Beijing-Baotou 京包铁路 Baolan Railway; Baotou-Lanzhou 包兰铁路 Lanqing Railway; Lanzhou-Xining 兰青铁路 Qingzang Railway; Xining-Lhasa 青藏铁路

b. Transcontinental Bridge Railways    

Longhai Railway; Lianyungang-Lanzhou 陇海铁路 Lanxin Railway; Lanzhou-Xinjiang 兰新铁路 Beijiang Railway (Northern Xinjiang Railway);Ürümqi-Alashankou (Alataw Pass)北疆铁路 Nanjiang Railway (Southern Xinjiang Railway); Turpan-Kashgar 南疆铁路

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c. Coastal Railway - Northern  

Ningxi Railway; Nanjing-Xi'an 宁西铁路 Ningqi Railway; Nanjing-Qidong 宁启铁路

- Southern   

Guangdong-Hainan Railway, Guangzhou-Haikou 粤海铁路 Wujiu Railway; Wuchang-Jiujiang 武九铁路 Ningwu Railway; Nanjing-Wuhu 宁芜铁

d. Shanghai-Kunming Railway (Hukun Line)    

Huhang Railway; Shanghai-Hangzhou 沪杭铁路 Zhegan Railway; Hangzhou-Zhuzhou 浙赣铁路 Xiangqian Railway; Zhuzhou-Guiyang 湘黔铁路 Guikun Railway; Guiyang-Kunming 贵昆铁路

e. Southwestern Railways connecting to the coast  

Nankun Railway; Nanning-Kunming 南昆铁路 Yuehai Railway; Zhanjiang-Haikou 粤海铁路

2.3.2 Regional Railways Northeast China   

Qibei Railway; Qiqihar-Bei'an 齐北铁路 Funen Railway; Fuyu-Nenjiang 富嫩铁路 Nenlin Railway; Nenjiang-Greater Khingan Forest District 嫩林铁路

Southwest China      

Chengyu Railway; Chengdu-Chongqing 成渝铁路 Chuanqian Railway; Chongqing-Guiyang 川黔铁路 Xiangyu Railway; Xiangfan-Chongqing 襄渝铁路 Yiwan Railway; Yichang-Wanzhou 宜万铁路 Yuli Railway; Chongqing-Lichuan 渝利铁路 Yunnan–Vietnam Railway; Kunming-Hanoi Railway 昆河铁路

Coal Transport Railways  

Daqin Railway 大秦铁路 Shenhuang Railway 神黄铁路 (operated by Shenhua Group Corporation Limited)

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2.4 Heavy Haul Transport in China Heavy haul transport in China refers to any railway with annual transport capacity of over 20 million tons, or any freight train with transport capacity of over 5’000 tons and axle load from 25 tons up to 30 tons. Datong – Qinghuangdao railway represents the development of heavy haul transport in China. It realized for the first time the combination of the locomotive wireless synchronous control technology and GSM-R technology, and therefore ensured the operation of a large number of combined trains of 10’000 tons and 20’000 tons. The annual transport capacity of the line increased rapidly after its designed capacity of 100 million tons was reached in 2002, until it reached 340 million tons in 2008. The expected capacity for the year 2010 is 400 million tons. This line constituting less than 1% of China’s total operational railway network carries 10% of the total railway freight volume in China.

2.5 Highland Railway in China The Qinghai–Tibet railway or Qinghai–Xizang railway, covering a total length of 1’972 km, is a high-altitude railway that connects Xining in Qinghai Province, with Lhasa in Tibet Autonomous Region. The construction of the railway was part of the China Western Development strategy, an attempt to develop the western provinces of China, which are much less developed than eastern China. This railway is the first to connect China proper with Tibet, which, due to its altitude and terrain, is the last provincial level entity in mainland China to have a conventional railway. The railway's highest point, the Tanggula Mountain Pass, is 5’072 meter above sea level, making it the highest railway in the world. More than 960 km, or over four-fifths of the railway, are at an altitude of more than 4’000 meters, and over half of it was laid on frozen earth. Because of the high altitudes, carriages are supplied with supplemental oxygen. Qinghai – Tibet railway crosses several world famous habitat reservation areas such as Qinghai Lake, Kunlun Mountains, Kekexili and Sanjiangyuan.

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3. HIGH SPEED RAILWAY 3.1 Overview High-speed rail in China refers to any commercial train service in the mainland China with an average speed of 200 km/h or higher. By that measure, China already has the world’s longest high speed rail (HSR) network with about 8’358 km of lines in service by the end of 2010, including the Beijing-Shanghai High Speed Railway of 1’318 km with designed speed of 380 km/h, which was completed on November 15, 2010 and is set to open in June 2011. The main operator of regular high speed train services in the mainland China is China Railway High-Speed (CRH). At present, CRH services about 1’200 high speed trains per day in China. With the 12th Five-Year Plan (2011-2015), China is going to put more than 1’500 high speed trains with speed from 200 km/h up to 350 km/h into operation. China's high speed rail lines consists of upgraded conventional rail lines, newly-built high speed passenger dedicated lines (PDLs), and the world’s first high-speed commercial magnetic levitation (maglev) line. The country is undergoing an HSR building boom. China is the first and only country in the world to have commercial train service on conventional rail lines that can reach 350 km/h. Notable examples of completed HSR in China include: 

    

Shanghai-Hangzhou High Speed Railway, an intercity express line of 202 km that opened on October 26, 2010, has put the first China-designed high speed train CRH380A (8-car train set) with operational speed of 350 km/h into regular service. The top speed attained during a testing run on September 28, 2010 is 416.6 km/h. The running time of the trains is 45 minutes. The Shanghai-Nanjing High Speed Railway, an intercity high speed line that opened on July 01, 2010, has reduced the 310 km journey between the two largest cities in East China to 1 hour and 13 minutes. The operational train speed is 350 km/h. The Zhengzhou-Xi’an High Speed Railway, the first passenger dedicated trunk line going into West China that opened on February 06, 2010, has reduced the 505 km journey between the two largest cities in central and western China to 1 hour and 58 minutes. The operational train speed is 350 km/h. The Wuhan–Guangzhou High Speed Railway, a passenger dedicated trunk line that opened on December 26, 2009, has reduced the 1’069 km journey between the two largest cities in central and southern China to 3 hours and 16 minutes. The operational train speed is 350 km/h. The Beijing-Tianjin Intercity Railway, an intercity high speed line that opened on August 01, 2008, has shortened the 120 km commute between the two largest cities in North China to 30 minutes. The operational train speed is 350 km/h. The Shanghai Maglev Train, an airport rail link service that opened in 2004, travels 30.5 km in 7 minutes and 20 seconds, averaging 245.5 km and reaching top speed of 431 km/h.

China’s initial high speed trains were imported or built under technology transfer agreements with foreign train makers including Siemens, Alstom, Bombardier and Kawasaki Heavy Industries. The top speed attained by a non-maglev train in China is 486.1 km/h by a first China-designed high speed train CRH380A on the Beijing-Shanghai High Speed Railway during the test run on December 03, 2010.

3.2 History State planning for China's high speed railway began in the early 1990s. The MoR submitted a proposal to build a high speed railway between Beijing and Shanghai to the National People's Congress in December 1990. At that time, the existing Beijing-Shanghai railway was already reaching its full capacity, and the proposal was jointly studied by the Science & Technology Commission, State Planning Commission, State Economic & Trade Commission, and the MoR. In December 1994, the State Council commissioned a feasibility study for the line. Policy planners debated the necessity and economic viability of high speed rail service. Supporters argued that high speed rail would boost future economic growth. Opponents noted that high speed rail in other countries were expensive and mostly unprofitable. It was believed that overcrowding on SwissRail Industry Association, January 2011, China Railway Market Study

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existing rail lines could be solved by expanding capacity through higher speed and frequency of service. In 1995, Premier Li Peng announced that preparatory work on the Beijing Shanghai HSR would begin in the 9th Five Year Plan (1996-2000), but construction was not scheduled until the first decade of the 21st century.

3.2.1 The "Speed Up" Campaigns In 1993, commercial train service in China averaged only 48 km/h and was steadily losing market share to airline and highway travel on the country's expanding network of expressways. The MoR focused modernization efforts on increasing the service speed and capacity on existing lines through double-tracking, electrification, improvements in grade (through tunnels and bridges), reductions in turn curvature, and installation of continuous welded rail. Through five rounds of "speed-up" campaigns in April 1997, October 1998, October 2000, November 2001, and April 2004, passenger service on 7’700 km of existing tracks was upgraded to reach sub-high speed of 160 km/h. A notable example is the Guangzhou-Shenzhen Railway, which in December 1994 became the first line in China to offer sub-high speed service of 160 km/h using Chinese-made DF-class diesel locomotives. The line was electrified in 1998, and Swedish-made X2000 trains increased service speed to 200 km/h. After the completion of a third track in 2000 and a fourth in 2007, the line became the first in China to run high-speed passenger and freight service on separate tracks. The completion of the sixth and final round of the "speed up" campaigns in April 2007 brought HSR service to more existing lines: 846 km capable of 250 km/h train service and 6,009 km capable of 200 km/h. Some 14,000 km of tracks could accommodate trains traveling at speeds up to 160 km/h. In all, travel speed was increased on 22,000 km, or 29%, of the national rail network, and the average speed of a passenger train in China improved to 70 km/h. The introduction of more non-stop service between large cities also helped to reduce travel time. The non-stop express train from Beijing to Fuzhou shortened the travel time from 33.5 to less than 20 hours. The Six “Speed-Up” Campaigns (1997-2007)

No.

Date

Cumulative length of track (km) that can carry trains with max speed of Average passenger trainspeed ≥ 120km/h ≥ 140km/h ≥ 160km/h ≥200km/h ≥ 250km/h (km/h)

First

1997-04-01

1’398

1’340

752

54.9

Second

1998-10-01

6’449

3’522

1’104

55.2

Third

2000-10-21

9’581

6’458

1’104

60.3

Fourth

2001-11-21

13’166

9’779

1’104

62.6

Fifth

2004-04-18

16’500

7’700

1’960

Sixth

2007-04-18

22’000

14’000

6’003

65.7 846

70.2

In addition to track and scheduling improvements, the deployment of the CRH series trains raised travel speed. During the sixth railway “speed-up” campaign, 52 CRH train sets (CRH1, CRH2 and CRH5) were put into operation. By the end of 2007, there were plans to have 158 CRH trainsets in operation. The new trains sliced 2 hours off of the 1,463 km trip between Beijing and Shanghai to a journey of just under 10 hours. Travel times from Shanghai to Changsha fell by 1.5 hour to 7.5 hours and the trip to Nanchang was halved. Higher speed express train service allowed more trains to share the tracks and increased rail transport capacity in China. But high speed trains often have to share tracks with heavy freight, in some cases with as little as 5 minutes headway. To attain higher speeds and transport capacity, railway planners in China began to consider passenger dedicated HSR lines on a grand scale.

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3.2.2 The Conventional Rail v. Maglev Debate The development of HSR network in China was initially held up by a debate over the type of track technology. In June 1998, at a State Council meeting with the Chinese Academies of Sciences and Engineering, Premier Zhu Rongji asked whether the high speed railway between Beijing and Shanghai still being planned could use maglev technology. At that time, Chinese planners were divided between using high-speed trains with wheels that run on conventional standard gauge tracks or magnetic levitation trains that run on special maglev tracks for a new national high-speed rail network. Maglev received a big boost in 2000 when the Shanghai Municipal Government agreed to purchase a turnkey TransRapid train system from Germany for the 30.5 km rail link connecting Shanghai Pudong International Airport and the city downtown. In 2004, the Shanghai Maglev Train became the world's first commercially operated high speed maglev. It remains the fastest train in China with peak speed of 431 km/h and makes the 30.5 km in less than 7.5 minutes. Despite unmatched advantage in speed, the maglev has not gained widespread use in China's high speed rail network due to high cost, German refusal to share technology and concerns about safety. The price tag of the Shanghai Maglev was believed to be $1.3 billion and was partially financed by the German government. The refusal of the Transrapid Consortium to share technology and source production in China made large scale-maglev production much more costly than high speed train technology for conventional lines. Finally, residents living along the proposed maglev route have raised health concerns about electromagnetic radiation emitted by the trains. These concerns have prevented construction to begin on the proposed extension of the maglev to Hangzhou. Even the more modest plan to extend the maglev to Shanghai's other airport, Hongqiao, has been stalled. Instead, a conventional subway line was built to connect the two airports, and a conventional high-speed rail line was built between Shanghai and Hangzhou. While the maglev was drawing attention to Shanghai, conventional track HSR technology was being tested on the newly completed Qinhuangdao-Shenyang (Qinshen) Passenger Railway. This 405 km standard gauge, dual-track, electrified line was built between 1999 and 2003. In June 2002, a Chinese-made DJF2 train set a record of 292.8 km/h on the track. The China Star (DJJ2) train followed the same year September with a new record of 321 km/h. The line supports commercial train service at speed of 200–250 km/h, and has become a segment of the rail corridor between Beijing and the Northeast China. The Qinshen Line demonstrates the greater compatibility of HSR on conventional track with the rest of China's standard gauge rail network. In 2006, the State Council in its “Mid-to-Long Term Railway Network Plan” adopted conventional track HSR technology over maglev. This decision ended the debate and cleared the way for rapid construction of standard gauge, passenger dedicated HSR lines in China.

3.2.3 Acquisition of Foreign Technology Despite setting speed records on test tracks, the DJJ2, DJF2 and other Chinese-made high speed trains were insufficiently reliable for commercial operation. The State Council turned to advanced technology abroad but made it clear in directives that China's HSR expansion cannot only benefit foreign economies. China's expansion must also be used to develop its own high-speed train building capacity through technology transfers. The State Council, the MoR and state-owned train manufacturers, China South Locomotive and Rolling Stock Corporation Limited (CSR) and China North Locomotive and Rolling Stock Corporation Limited (CNR) used China's large market and competition among foreign train makers to induce technology transfers. In 2003, the MoR was believed to favor Japan's Shinkansen technology, especially the 700 series, which was later exported to Taiwan. The Japanese government touted the 40-year track record of the Shinkansen and offered favorable financing. A Japanese report envisioned a winner-take all scenario in which the winning technology provider would supply China's trains for over 8,000 km of high speed rail. However, Chinese netizens angry with Japan's World War II atrocities organized a web campaign to oppose the awarding of HSR contracts to Japanese companies. The protests gathered over a million signatures and politicized the issue.

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The MoR delayed the decision, broadened the bidding and adopted a diversified approach to adopting foreign high-speed train technology. In June 2004, the MoR solicited bids to make 200 high speed train sets that can run 200 km/h. Alstom of France, Siemens of Germany, Bombardier Transportation based in Germany and a Japanese consortium led by Kawasaki all submitted bids. With the exception of Siemens which refused to lower its demand of RMB (¥) 350 million per train set and €390 million for the technology transfer, the other three were all awarded portions of the contract. All had to adapt their HSR train sets to China's own common standard and assemble units through local joint ventures or cooperate with Chinese manufacturers. Bombardier, through its joint venture with CSR’s Sifang Locomotive and Rolling Stock Co., Ltd. (CSR Sifang), Bombardier Sifang (Qingdao) Transportation Ltd. (BST) won an order for 40 eight-car train sets based on Bombardier's Regina design. These trains, designated as CRH1A, were delivered in 2006. Kawasaki won an order for 60 train sets based on its E2 Series Shinkansen for ¥9.3 billion. Of the 60 train sets, three were directly delivered from Nagoya of Japan, six were kits assembled at CSR Sifang, and the remaining 51 were made in China using transferred technology with domestic and imported parts. They are known as CRH2A. Alstom also won an order for 60 train sets based on the New Pendolino developed by Alstom-Ferroviaria in Italy. The order had a similar delivery structure with three shipped directly from Savigliano along with six kits assembled by CNR’s Changchun Railway Vehicles Co., Ltd., and the rest locally made with transferred technology and some imported parts. Trains with Alstom technology carry the CRH5 designation. The following year, Siemens reshuffled its bidding team, lowered prices, joined the bidding for 300 km/h trains and won an order of 60 train sets. It supplied the technology for the CRH3C, based on the Velaro design, to CNR's Tangshan Railway Vehicle Co. Ltd. The transfered technology includes assembly, body, bogie, traction converters, traction transformers, traction motors, traction control, brake systems, and train control networks.

Regina, Bombardier

CRH1

E2 Series Shinkansen, Kawasaki

CRH2

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Velaro, Siemens

CRH3

New Pendolino, Alstom

CRH5

3.2.4 Localization and Increasing Speed Digestion and re-innovation is one of the major considerations of the Chinese MoR when China decided to import foreign technologies. With the technologies acquired from foreign companies, Chinese factories are able to produce components of the vehicles. Mitsubishi Electric transfer MT205 traction motor and ATM9 transformer to CSR Zhuzhou Electric, Hitachi transfer YJ92A traction motor to Yongji Electric, Alstom transfer YJ87A Traction motor to Yongji Electric, Siemens transfer TSG series pantograph to Zhuzhou Gofront Electric. Most of the components of the CRH trains manufacturer by Chinese companies are from local suppliers, few parts of them are imported. During June 2005 and September 2005, the Chinese MoR launched bidding for high speed trains with a top speed of 350 km/h, as most of the main high speed lines in China are designed with top speed of 350km/h or higher. Along with CRH3C, produced by Siemens and CNR Tangshan, CSR Sifang bid 60 sets of CRH2C. Within two years of co-operation with Kawasaki to produce 60 CRH2A sets, CSR had “digested” the technology required for their own manufacturing. Since then CSR is no longer co-operating with Kawasaki. Starting from 2008, all CRH2 trains, includes CRH2B, CRH2C and CRH2E were designed and manufactured under key technology developments made by CSR Sifang without Kawasaki. According to CSR president Zhang Chenghong, CSR "made the bold move of forming a systematic development platform for high-speed locomotives and further upgrading its design and manufacturing technology." In order to provide higher capacity and more comfortable service in the Jinghu Railway, as the travel time from Beijing to Shanghai is around 10 hours with top speed of 200 km/h on the upgraded railway, in October 2007, the MoR ordered 70 16-car train sets from CSR Sifang and BST, including 10 sets of CRH1B and 20 sets of CRH2B seating trains, 20 sets of CRH1E and 20 sets of CRH2E sleeper trains.

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Technical support is one of the most important factors to make Bombardier the first and only company who has a Chinese-foreign Joint Venture manufacturing railway passenger cars and rolling stock in China. Bombardier Sifang (Qingdao) Transportation Ltd. (BST) was established by 1998, as an excellent example of foreign technology applied to the renewal of state-owned enterprises in China. In an interview with Zhang Jianwei, President and Chief Country Representative of Bombardier China, he explained Bombardier's policy in China is "to transfer whatever Bombardier have in the world to the joint venture, to transfer what China market needs without condition". Not like other series who has prototype imported from other countries, all of the CRH1 trains are manufactured in BST in Qingdao. Construction of China and world's first ever high speed rail with designed speed 380 km/h, the Beijing Shanghai High Speed Railway, began on April 18, 2008. In the same year, the Chinese Ministry of Science and the Chinese Ministry of Railways signed the "Cooperation agreement on joint action plan for the independent innovation of high speed trains in China", the MoR then launched three projects CRH1-350 (Bombardier and BST, designated as CRH380C/CL), CRH2-350 (CSR, designated as CRH380A/AL), and CRH3350 (CNR and Siemens, designated as CRH380B/BL), to develop new generation of CRH trains with top operational speed of 380 km/h. A total of 400 new generation trains were ordered. CRH380A came into regular service at the Shanghai-Hangzhou High Speed Railway by October 26, 2010, which is the first high speed train designed by China.

CRH380A, the 1st China-designed high speed train On October 19, 2010, the MoR declared that China has begun research and development on a new "superspeed" railway technology, will increase the average speed of trains to over 500 km/h.

3.3 Current HSR Expansion China's high speed rail expansion is entirely managed, planned and financed by the government. After committing to conventional-track high speed rail in 2006, the state has embarked on an ambitious campaign to build passenger dedicated high speed rail lines, which accounts for a large part of the government's growing budget for rail construction. Total investment in new rail lines grew from $14 billion in 2004 to $22.7 and $26.2 billion in 2006 and 2007. In response to the global economic recession, the government accelerated the pace of HSR expansion to stimulate economic growth. Total investments in new rail lines including HSR reached $49.4 billion in 2008, $88 billion in 2009 and $100 billion in 2010. During China’s 12th Five-Year Plan (2011-2015), the state plans to spend around $280 billion (¥1.875 trillion) to build 16’448 km high speed rail, based on the cost calculation of $17 million (¥114 million) per kilometer.

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3.3.1 Policy Justifications Critics both in China and abroad have questioned the necessity of having an expensive high speed rail system in a largely developing country, where most workers cannot afford to pay a premium for faster travel. The government has justified the expensive undertaking as promoting a number of policy objectives. HSR provides fast, reliable and comfortable means of transporting large numbers of travelers in a densely populated country over long distances, which: 

  

improves economic productivity and competitiveness over the long term by increasing the transport capacity of railways and linking labour markets. Moving passengers to high speed lines frees up older railways to carry more freight, which is more profitable for railways than passengers, whose fares are subsidized. stimulates the economy in the short term as HSR construction creates jobs and drives up demand for construction, steel and cement industries during the economic downturn. Work on the BeijingShanghai PDL mobilized 110’000 workers. promotes the growth of urban centers and limits sprawl. High speed rail links city centers, which are building subways. These measures alleviate traffic congestion. supports energy independence and environmental sustainability. Electric trains use less energy to transport people and goods on a per unit basis and can draw power from more diverse sources of energy including renewables than automobile and aircraft which are more reliant on imported petroleum.

The expansion of HSR is also developing China into a leading source of high speed rail building technology. Chinese train makers have absorbed imported technologies quickly and localized production processes. Six years after receiving Kawasaki's license to produce Shinkansen E2, CSR Sifang is able to produce the CRH2A without Japanese input, and has ended cooperation with Kawasaki on high speed rail.

3.3.2 HSR Construction Financing China's high-speed rail construction projects are highly capital intensive. They are primarily funded by stateowned banks and financial institutions, which lend money to the MoR and local governments. The MoR, through its financing arm, the China Rail Investment Corporation (CRIC), issued an estimated ¥1 trillion ($150 billion in 2010) in debt to finance HSR construction from 2006 to 2010, including ¥310 billion in the first 10 months of 2010. CRIC has also raised some capital through equity offerings; in the spring of 2010, CRIC sold a 4.5% stake in the Beijing-Shanghai High Speed Railway to Bank of China for ¥6.6 billion and a 4.537% stake to the public for ¥6 billion. CRIC retained 56.2% ownership on that line. As of 2010, the CRIC bonds are considered to be relatively safe investments because they are backed by assets (the railways) and implicitly by the government. The following table shows the construction cost of the HSR lines that are already opened. 250 km/h HSR Line

Length

Construction cost (Total)

Construction cost (per km)

Qinshen PDL

404 km

15.7 billion RMB (2.4 billon USD)

38.9 million RMB (5.9 millon USD)

Hening PDL

166 km

25 billion RMB (3.8 billon USD)

150.6 million RMB (22.7 millon USD)

Jiaoji PDL

364 km

11 billion RMB (1.7 billon USD)

30.21 million RMB (4.6 millon USD)

Shitai PDL

190 km

17.075 billion RMB (2.57 billon USD)

89.87 million RMB (13.5 millon USD)

Hewu PDL

351 km

16.8 billion RMB (2.53 billon USD)

47.86 million RMB (7.21 millon USD)

Yongtaiwen PFL 268 km

16.28 billion RMB (2.45 billon USD)

60.75 million RMB (9.16 millon USD)

Wenfu PFL

298 km

18 billion RMB (2.71 billon USD)

60.4 million RMB (9.1 millon USD)

Fuxia PFL

275 km

15.259 billion RMB (2.3 billon USD)

55.49 million RMB (8.36 millon USD)

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Chengguan PDL 65 km Changjiu ICL 131 km

13.3 billion RMB (2 billon USD)

204.62 million RMB (30.8 millon USD)

5.832 billion RMB (0.88 billon USD)

44.52 million RMB (6.7 millon USD)

350 km/h HSR Line

Length

Construction cost (Total)

Construction cost (per km)

Jingjin ICL

115 km

21.5 billion RMB (3.24 billon USD)

186.96 million RMB (28.17 millon USD)

Wuguang PDL

968 km

116.6 billion RMB (17.57 billon USD)

120 million RMB (18.08 millon USD)

Zhengxi PDL

455 km

35.31 billion RMB (5.32 billon USD)

77.6 million RMB (11.7 millon USD)

Huning HSR

301 km

50 billion RMB (7.5 billon USD)

166.11 million RMB (25 millon USD)

Huhang PDL

150 km

29.29 billion RMB (4.4 billon USD)

195.27 million RMB (29.4 millon USD)

Large construction debt loads require significant revenues from rider fares and other sources of income, such as advertising, to repay. Despite impressive ridership figures, virtually every completed line has incurred losses in its first years of operation. For example, the Beijing-Tianjin Intercity Railway in its two full years of operation, delivered over 41 million rides. The line cost ¥20.42 billion to build, and ¥1.8 billion per annum to operate, including ¥0.6 billion in interest payments on its ¥10 billion of loan obligations. The terms of the loans range from 5-10 years at interest rates of 6.3 to 6.8 percent. In its first year of operation from August 1, 2008 to July 31, 2009, the line carried 18.7 million riders and generated ¥11 billion in revenues, which resulted in a loss of ¥0.7 billion. In the second year, ridership rose to 22.3 million and revenues improved to ¥14 billion, which narrowed losses somewhat to below ¥0.5 billion. To break even, the line must deliver 30 million rides annually. To be able to repay principal, ridership would need to exceed 40 million. As of September 2010, daily ridership averaged 69,000 or an annual rate of 25.2 million. The line has a capacity of delivering 100 million rides annually and initial estimated repayment period of 16 years. The Shijiazhuang-Taiyuan PDL lost ¥0.8 billion in its first year and is set to lose ¥0.9 billion in 2010. The Southeast HSR corridor lost ¥0.377 billion in its first year beginning August 2009. The Zhengzhou-Xi’an PDL since opening in February of 2010 is expected to generate revenues of ¥0.6 billion in its first full year but must make interest payments of ¥1.1 billion. All of these losses must be covered by the operator, which is usually subsidized by local governments. The MoR faces a debt-repayment peak in 2014. Some economists recommend further subsidies to lower fares and boost ridership and ultimately revenues. Others warn that the financing side of the existing construction and operation model is unsustainable. If the rail-backed loans cannot be fully repaid, they may be refinanced or the banks may seize ownership of the railways. To prevent that eventually, the MoR is trying to improve management of its rapidly growing HSR holdings.

3.4 HSR Network and Construction Plans China is ambitious with its HSR construction, with an existing network of 8’358 km by 2010. China plans to build a HSR network of over 16’000 km by the end of its 12th Five-Year Plan (2011-2015). Chinese MoR claims to build a HSR network of 25’000 km with trains reaching operational speed of 350 km/h by 2020. China plans to have the largest, fastest, and most technologically advanced high-speed rail system in the world by that time. China's conventional high speed railway network is made up of four components:    

upgraded pre-existing rail lines that can accommodate high speed trains a national grid of mostly Passenger Dedicated HSR Lines (PDLs) other newly-built conventional rail lines, mostly in western China, that can carry high speed passenger and freight trains certain regional intercity HSR lines

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Most of the rail lines in the latter three categories are now under construction.

Map showing the rail network of China and Taiwan with high-speed lines highlighted in color according to the speed of train service.

3.4.1 Upgraded Railways Following the "sixth national speed-up campaign" in April 18, 2007, some 6’003 km of track could carry trains at speeds of up to 200 km/h. Of these, some 848 km could reach 250 km/h and above. These include the Qinhuangdao-Shenyang (Qinshen) Passenger Railway, which was initially built for 200 km/h trains when completed in 2003 and then upgraded to 250 km/h during the Sixth Speed-up Campaign, and sections of the Qingdao-Jinan (Jiaoji), Shanghai-Kunming (Hukun) (between Hangzhou and Zhuzhou), GuangzhouShenzhen (Guangshen), Beijing-Shanghai (Jinghu), Beijing-Harbin (Jingha), Beijing-Guangzhou (Jingguang), Longhai (between Zhengzhou to Xuzhou) Railways. Upgrade work continues on other lines including the Wuhan-Danyang (Handan), Hunan-Guizhou (Xianggui), and Nanjing-Nantong (Ningqi) Railways. Upgraded High-Speed Rail Tracks After the Sixth Speed-Up Campaign (2007-04-18) (Capable of Accommodating Train Speeds of 200+ km/h)

Line

Upgraded Section

Upgraded Track Length in km (double track counted twice)

Beijing-Harbin (Jingha)

Tongxian–Fengrun (K27.2–K148.4)

Beijing-Harbin (Jingha)

Shanhaiguan–Huanggutun (K319–K697), of which the Shanhaiguan–Taian (K323–K603) section (560 756 km) was upgraded to 250 km/h

Beijing-Harbin (Jingha)

Caijiagou–Wujia (K1172–K1226)

108

Beijing-Shanghai (Jinghu)

Zhoulizhuang–Qingxian (K162.4–K218.8)

112.8

Beijing-Shanghai (Jinghu)

Jiedi–Changzhuang (K260.8–K363.6)

205.6

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Beijing-Shanghai (Jinghu)

Gaojiaying–Fuliji (K810.6–K859)

96.8

Beijing-Shanghai (Jinghu)

Sùzhou–Tangnanji (K877.2–K918.2)

82

Beijing-Shanghai (Jinghu)

Zhenjiang South–Benniu (K1217.8–K1269.2)

102.8

Beijing-Shanghai (Jinghu)

Kunshan–Shanghai (K1402.7–K1450), of which the Anting–Shanghai West (K1425.9–K1446) section 94.6 (40.2 km) was upgraded to 250 km/h

Beijing-Guangzhou (Jingguang)

Doudian–Caohe (K30.2–K123.1)

185.8

Beijing-Guangzhou (Jingguang)

Yuanshi–Xingtai (K309.3–K377.6)

136.6

Beijing-Guangzhou (Jingguang)

Hebi–Weihui (K532–K571.6)

79.2

Beijing-Guangzhou (Jingguang)

Guanting–Luohe (K732.2–K815.9), of which the Xuchang South–Mengmiao (K764.1–K809) section 167.4 (89.8 km) was upgraded to 250 km/h

Beijing-Guangzhou (Jingguang)

Huohe–Changtaiguan (K821–K956), of which the Luohe–Suiping (K821–K863) section (84 km) was upgraded to 250 km/h

270

Beijing-Guangzhou (Jingguang)

Lijiazhai–Chenjiahe (K1108.5–K1065.4)

113.8

Guangzhou-Shenzhen (GuangsXintang–Honghai (K39.8–K61.4) hen)

43.2

Longhai

Tongshan–Zhengzhou East (K232.6–K563)

660.8

Longhai

Xianyang–Changxing (K1096–K1179.8)

167.6

Shanghai-Kunming (Hukun)

Bailutang–tangya (K222.5–K344.6)

244.2

Shanghai-Kunming (Hukun)

Bailongqiao–Guixi (K363.7–K645.9)

364.4

Shanghai-Kunming (Hukun)

Yingtan–Binjiang (K664.5–K934.9)

540.8

Shanghai-Kunming (Hukun)

Xicun–Baiyuan (K991.1–K1015)

47.8

Shanghai-Kunming (Hukun)

Yaojiazhou–Wulidun (K1035.7–K1090.6)

109.8

Qingdao-Jinan (Jiaoji)

Loushan–Licheng (K23.2–K345.2), of which the Jimo–Gaomi (K50–K86) section (72 km) was upgraded to 250 km/h

644

Wuhan-Jiujiang (Wujiu)

Heliu–Yangxin (K38.4–K152.1)

227.4

Total

6,003.8 km (200+ km/h), including 846 km (250 km/h)

3.4.2 Natonal High Speed Rail Grid (4 + 4) The centerpiece of the MoR’s expansion into high speed rail is a new national high speed rail grid that is overlaid onto the existing railroad network. According to the MoR's "Mid-to-Long Term Railway Network Plan" approved in 2006 and revised in 2008, this grid is composed of 8 high speed rail corridors, 4 running northsouth and 4 traversing east-west, and has a total of 12’000 km. Most of the new lines follow the routes of existing trunk lines and are designated for passenger travel only. They are known as Passenger Dedicated Lines (PDLs). Several sections of the national grid, especially along the southeast coastal corridor, were built to link cities which had no previous rail connections. Those sections will carry a mix of passenger and freight, but are sometimes mislabeled as PDLs. High speed trains on PDLs can generally reach 300-350 km/h. On mixed-use HSR lines, passenger train service can attain peak speeds of 200-250 km/h. This ambitious national grid project was planned to be built by 2020 by the “Mid-to-Long Term Railway Network Plan”, but China’s Economic Stimulus Program due to the world financial crisis has expedited the timetables considerably for many of the lines. In addition, Jinqin Passenger Railway (Tianjin-Qinhuangdao) and Qinshen Passenger Railway (Qinhuangdao-Shenyang) are not the component parts of 8 main high speed rail lines, but these two lines are still SwissRail Industry Association, January 2011, China Railway Market Study

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included in the PDL network because they are important in linking Beijing-Harbin Line and Beijing-Shanghai Line.

Map showing China's planned high-speed rail lines forming the national grid

Four North-South HSR Corridors and Constituent Lines (Operational lines are marked with green background.) Designed Length Construction Open Speed (km) Start Date Date (km/h)

Rail Line

Route Description

Beijing-Harbin PDL (Jingha Passenger Designated Line)

Main HSR corridor of Northeast China, consisting of the BeijingShenyang & Harbin-Dalian PDLs and the Panjin-Yinkou spur.

350

1’700

2007-08-23

2014

Beijing-Shenyang PDL (Jingshen Passenger Designated Line)

Beijing-Shenyang segment of Jingha PDL, via Chengde, Fuxin and Chaoyang

350

684

2010

2014

Harbin-Dalian PDL (Hada Passenger Designated Line)

PDL from Harbin to Dalian via Shenyang & Changchun

350

904

2007-08-23

2011

Panjin-Yingkou PDL (Panying Passenger Designated Line)

Connects Yingkou to Qinhuangdao-Shenyang HSR at Panjin

350

89

2009-05-31

2012

Beijing-Shanghai PDL (Jinghu Passenger Designated Line)

Main north-south high speed railway of eastern China, connecting Beijing, Jinan, Tai'an, Xuzhou, Bengbu, Nanjing & Shanghai

380

1’302

2008-04-18

2012

Hefei-Bengbu PDL (Hebeng Passenger Designated Line)

Extends Jinghu PDL from Bengbu to Hefei

350

131

2008-01-08

2012

Main north-south high speed rail corridor through central China, Beijing-Guangzhou PDL consisting of four segments be(Jinggang Passenger Designated Line) tween Beijing, Shijiazhuang, Wuhan, Guangzhou, and Hong Kong.

200350

2’229

2005-09-01

2012

350

281

2008-10-08

201210-01

Beijing-Shijiazhuang PDL (Jingshi Passenger Designated Line)

HSR from Beijing to Shijiazhuang

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Shijiazhuang-Wuhan PDL (Shiwu Passenger Designated Line)

HSR from Shijiazhuang to Wuhan via Zhengzhou

350

838

2008-10-15

201210-01

Wuhan-Guangzhou PDL (Wuguang Passenger Designated Line)

HSR from Wuhan to Guangzhou via Changsha

350

968

2005-09-01

200912-26

Southeast Coastal HSR Corridor

High-speed railway linking coastal cities from Hangzhou to Shenzhen, built in five segments.

200350

1’450

2005-08-01

201101-01

Hangzhou-Ningbo PDL (Hangyong Passenger Designated Line)

High-speed PDL from Hangzhou to Ningbo

350

152

2009-04

201112

Ningbo-Taizhou-Wenzhou Railway (Yongtaiwen Line)

Mixed passenger & freight HSR line along the coast of Zhejiang Province.

250

268

2005-10-27

200909-28

Wenzhou-Fuzhou Railway (Wenfu Line)

Mixed passenger & freight HSR line from Wenzhou to Fuzhou.

250

298

2005-01-08

200909-28

Fuzhou-Xiamen Railway (Fuxia Line)

Mixed passenger & freight HSR line along the coast of Fujian Province from Fuzhou to Xiamen via Putian & Quanzhou.

250

275

2005-10-01

201004-26

Xiamen-Shenzhen Railway (Xiashen Line)

Mixed passenger & freight HSR line along the coast of Fujian and Guangdong via Zhangzhou, Shantou & Huizhou.

250

502

2007-11-23

201101-01

Four East-West HSR Corridors and Constituent Lines (Operational lines are marked with green background.) Designed Construction Open Length Speed Start Date Date (km) (km/h)

Rail Line

Route Description

Qingdao-Taiyuan PDL (Qingtai Passenger Designated Line)

HSR across north China consisting of three segments connecting Taiyuan, Shijiazhuang, Jinan and Qingdao.

250

873

2005-06-01

2012

Qingdao-Jinan PDL (Jiaoji Line)

PDL connecting Qingdao and Jinan

250

364

2007-01-28

200812-20

Shijiazhuang-Jinan PDL (Shiji Passenger Designated Line)

PDL connecting Shijiazhuang & Jinan via Dezhou

250

319

2009

2012

Shijiazhuang-Taiyuan PDL (Shitai Passenger Designated Line)

PDL connecting Shijiazhuang & Taiyuan.

250

190

2005-06-11

200904-01

Xuzhou-Lanzhou PDL (Xulan Passenger Designated Line)

HSR across the Yellow River Valley of central China, consisting of four segments connecting Xuzhou, Zhengzhou, Xian, Baoji and Lanzhou.

350

1’363

2005-06-01

-

Zhengzhou-Xuzhou PDL (Zhengxu Passenger Designated Line)

PDL connecting Xuzhou & Zhengzhou

350

357

2010

2013

Zhengzhou-Xi’an PDL (Zhengxi Passenger Designated Line)

PDL connecting Zhengzhou & Xian

350

455

2005-09-01

201002-06

Xian-Baoji PDL (Xibao Passenger Designated Line)

PDL connecting Xian & Baoji

350

148

2009-11-22

2012

Baoji-Lanzhou PDL (Baolan Passenger Designated Line)

PDL connecting Baoji & Lanzhou

350

403

planning

planning

HSR corridor through the Yangtze Valley, consisting of the Shanghai-

200350

2’078

2003-12-01

2012

Shanghai-Wuhan-Chengdu HSR

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Corridor (Huhanrong High-Speed Rail Corridor)

Nanjing section of the BeijingShanghai PDL, and 7 mixed-use HSR segments connecting Nanjing, Hefei, Wuhan, Yichang, Lichuan, Chongqing, Suining & Chengdu.

Hefei-Nanjing HSR (Hening HSR)

Mixed passenger & freight HSR connecting Nanjing & Hefei

250

166

2005-06-11

200804-19

Hefei-Wuhan Railway (Hewu Passenger Designated Line)

Mixed passenger & freight HSR connecting Hefei & Wuhan

250

351

2005-08-01

200904-01

Hankou-Yichang Railway (Hanyi Line)

Mixed passenger & freight HSR connecting Wuhan & Yichang

250

293

2008-09-17

201201-01

Yichang-Wanzhou Railway (Yiwan Railway, Yichang-Lichuan section)

Mixed passenger & freight HSR connecting Yichang & Lichuan

200

377

2003-12-01

201012-23

Chongqing-Lichuan Railway (Yuli Line)

Mixed passenger & freight HSR connecting Lichuan & Chongqing

200

264

2008-12-29

2012

Suining-Chongqing Railway* (Suiyu Line)

Mixed passenger & freight HSR connecting Chongqing & Suining

200

132

2009-01-18

201201

Dazhou-Chengdu Railway* (Dacheng Railway, Suining-Chengdu section)

Mixed passenger & freight HSR connecting Suining & Chengdu.

200

148

2005-05

200906-30

Shanghai-Kunming PDL (Shanghai-Kunming Passenger Designated Line)

PDL connecting eastern, central and southwestern China. It consists of three sections connecting Shanghai, Hangzhou, Changsha and Kunming.

350

2’066

2008-12-28

2014

Shanghai-Hangzhou PDL (Huhang Passenger Designated Line)

PDL connecting Shanghai Hongqiao & Hangzhou East.

350

150

2009-02-26

201010-26

Hangzhou-Changsha PDL (Hangchang Passenger Designated Line)

PDL connecting Hangzhou & Changsha.

350

926

2009-12-22

2012

Changsha-Kunming PDL (Changkun Passenger Designated Line)

PDL connecting Changsha & Kunming

350

1’175

2010

2014

3.4.3 Other High Speed Rail Lines According to the "Mid-to-Long Term Railway Network Plan", the MoR plans to build over 40’000 km of railway in order to expand the railway network in western China and to fill gaps in the networks of eastern and central th China. With China’s 12 Five-Year Plan (2011-2015), 50’000 km rail lines will be built in the western part of the country. Some of these new railways are being built to accommodate speed of 200-250 km/h for both passengers and freight transport. These are also considered high speed railways though they are not part of the national PDL grid or intercity high speed railways. Other High Speed Passenger Dedicated Lines (Operational lines are marked with green background.)

Rail Line

Route Description

Main HSR corridor on west side of Guangzhou-Hong Kong PDL the Pearl River Delta, consisting of (Jinggang Passenger Designated Line) two segments between Guangzhou and Hong Kong.

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Designed Construction Length Speed Start Date (km) (km/h) 200350

142

2008-08-20

Open Date

2016

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Guangshengang XRL (Mainland Section)

HSR from Guangzhou to Shenzhen

350

116

2008-08-20

201012-28

Guangshengang XRL (Hong Kong Section)

HSR from Shenzhen to Hong Kong

200

26

2010

2016

Originally part of the Jingha PDL. An important linkage between Tianjin and Shenyang through Qinhuangdao.

250

665

1999

2012

Tianjin-Qinhuangdao PDL (Jinqin Passenger Designated Line)

PDL connecting Tianjin & Qinhuangdao.

350

261

2008

2012

Qinhuangdao-Shenyang PDL (Qinshen Passenger Designated Line)

PDL connecting Qinhuangdao & Shenyang via .

250

404

1999

200307-01

Chengdu-Guangzhou PDL (Chengguang Passenger Designated Line)

HSR from the Pearl River Delta to the Sichuan Basin via Guiyang & Guilin.

300-350

1’376

2008-10-13

2014

Chengdu-Guiyang PDL (Chenggui Passenger Designated Line)

PDL connecting Chengdu & Guiyang via Leshan, Yibin & Bijie.

350

519

2010

2014

Guiyang-Guangzhou PDL (Guiguang Passenger Designated Line)

PDL connecting Guiyang & Guangzhou.

300

857

2008-10-13

2014

HSR from Lanzhou to Ürümqi via Xining & Zhangye, Jiuquan, Jiayuguan, Hami & Turpan

300

1’776

2010

2014

Hefei-Fuzhou PDL (Hefu Passenger Designated Line)

HSR from the Hefei to Fuzhou via Huangshan, Shangrao & Wuyishan.

250

806

2010-04-27

2014

Datong-Xian PDL (Daxi Passenger Designated Line)

HSR from Datong to Xi'an via Taiyuan.

250

859

2009-12-03

2013

Xian-Chengdu HSR (Xicheng High-Speed Railway)

HSR from Xian to Chengdu via Hanzhong and Guangyuan.

250

510

2010

2015

Shangqiu-Hangzhou PDL (Shanghang Passenger Designated Line)

HSR from Shangqiu to Hangzhou via Fuyang Hefei & Wuhu.

350

770

2010

-

Tianjin-Shenyang PDL (Jinshen Passenger Designated Line)

Lanzhou-Xinjiang PDL (Lanxin Passenger Designated Line)

Class I High Speed Railways Rail Line

Length (km)

Design Speed (km/h)

Construction Start Date

Open Date

Longyan-Xiamen

171

250

2006-12-25

2010

Nanchang-Putian (Fuzhou)

604

250

2007-11-23

2011

Guangzhou-Nanning

577

250

2008-09-11

2013

Other High Speed Rail Line Under Planning 

Guangzhou-Zhanjiang HSR

3.4.4 Intercity High Speed Rail Intercity railways are designed to provide regional high speed rail service between large cities and metropolitan areas that are generally within the same province in China. Intercity HSR service speed range from 200 to 350 km/h.

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Inter-city train services crossing the China-Hong Kong border (often known as through trains) are jointly operated by the MoR and Hong Kong's MTR Corporation. Currently, Hung Hom Station is the only station in the territory where passengers can catch these border-crossing trains. Passengers have to go through immigration and custom inspections before boarding a border-crossing train. There are currently four border-crossing train services:    

Between Hong Kong and Beijing (Beijing-Kowloon Through Train) Between Hong Kong and Shanghai (Shanghai-Kowloon Through Train) Between Hong Kong and Guangzhou (Guangzhou-Kowloon Through Train) Between Hong Kong and Zhaoqing (Zhaoqing-Kowloon Through Train)

A new border-crossing service, the Guangzhou-Shenzhen-Hong Kong Express Rail Link, has been approved and has been granted HKD 6.6 billion in funding by the Hong Kong Legco finance committee. The line is now under construction. A new station, West Kowloon Terminus, will be built in Hong Kong to be served by this new railway. Rail services that connect the towns in the New Territories with the city centres of Kowloon and Hong Kong Island are provided by the East Rail Line, West Rail Line and Tung Chung Line.

Map showing some of China's intercity railways, including operational lines (red) and lines under construction

Intercity High Speed Rail Construction Schedule (Operational lines are marked with green background.) Line

Length Design Speed (km) (km/h)

Construction Start Date YYYY-MM-DD

Open Date YYYY-MM-DD

Beijing–Tianjin Intercity Rail

115

350

2005-04-07

2008-08-01

Chengdu-Dujiangyan High-Speed Railway

65

220

2008-11-04

2010-05-12

Shanghai–Nanjing High-Speed Railway

301

350

2008-07-01

2010-07-01

Nanchang-Jiujiang Intercity Rail

131

250

2007-06-28

2010-09-20

Hainan East Ring Intercity Rail

308

250

2007-09-29

2010-12-30

Changchun-Jilin Intercity Rail

111

250

2007-05-13

2010

Guangzhou-Zhuhai Intercity MRT

142

250

2005-12-18

2011-01-07

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Nanjing-Anqing Intercity Rail

257

250

2008-12-28

2012-06

Nanjing-Hangzhou Intercity Rail

251

350

2008-12-28

2012-12-28

Jiangyou-Mianyang-Chengdu-Leshan Intercity Rail

319

200

2008-12-30

2012-12-30

Wuhan Megalopolis Intercity Rail （Wuhan-Xiaogan, Huangshi, Xianning and Huanggang）

160

200

2009-03-22

2011-10-01, 2013

Beijing-Tangshan Intercity Rail

160

350

2009

2012

Tianjin-Baoding Intercity Rail

145

250

2009

2012

Qingdao-Rongcheng Intercity Rail

299

250

2009-11-30

2012-12

Harbin-Qiqihar Intercity Rail

286

250

2008-11-25

2011

Beijing-Zhangjiakou Intercity Rail

174

200

2009

2013

Chongqing-Wanzhou Intercity Rail

250

350

2009

2013

Shenyang-Dandong Intercity Rail

208

350

2009

2013-9

Chengdu-Chongqing Intercity Rail

305

300

2009

?

Changsha-Zhuzhou-Xiangtan Intercity Rail

95.5

200

2010-07-02

2014-07-02

Hangzhou-Huangshan High Speed Railway

262

250

2010-xx-xx

2013

3.5 HSR Service Chinese Railways, the MoR's national railway service operator, provides high speed train service called China Railway High-speed (CRH) (中国铁路高速) on upgraded conventional rail lines, national high speed railways and intercity high speed lines. The CRH's high speed trains are also called "Harmony" (和谐号). At present, CRH services about 1’200 high speed trains per day in China. China plans to put more than 1’500 high speed trains from 200 km/h up to 350 km/h into service during its 12th Five-Year Plan (2011-2015).

3.5.1 CRH Service on Upgraded Conventional Lines As of September 2010, there is a total of 2’876 km of upgraded conventional railways in China that can accommodate trains running at speed of 200 to 250 km/h. Over time with the completion of the national high speed passenger dedicated rail network, more CRH service will shift from these lines to the high speed dedicated lines. A. Intercity service (typically, listed in schedules as C-series or D-series trains):          

Beijing-Beidaihe, Qinhuangdao Beijing-Tianjin, Tanggu Beijing-Shijiazhuang, Taiyuan Shanghai-Kunshan, Suzhou, Wuxi, Changzhou, Nanjing, Hefei, Xuzhou Shanghai-Hangzhou, Yiwu, Jinhua, Quzhou Nanjing-Hangzhou Guangzhou-Shenzhen Wuhan-Zhengzhou, Changsha Changsha-Nanchang Xi'an-Baoji

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B. Long-haul service (typically, listed in schedules as G-series or D-series trains):      

Beijing-Shenyang, Changchun, Harbin Beijing-Jinan, Qingdao, Shanghai Beijing-Zhengzhou, Wuhan Shanghai-Zhengzhou, Qingdao, Shenyang Shanghai-Nanchang Wuhan-Changsha-Guangzhou

The table below lists the upgraded conventional railways that run 10 or more CRH high speed trains per day.

Route

Railway

Distance

Trains per day (aggregation of both direction)

Trains in service

Guangzhou-Shenzhen

Guangshen line

147 km

220

CRH1A

Ningbo-Hangzhou

Hangning line

149 km

50

CRH1A/B/E CRH2A/B/E

Beijing-Shijiazhuang

Jingguang line

277 km

46

CRH2A CRH5A

Beijing-Shenyang

Jingha line

703 km

24

CRH5A

Beijing-Jinan

Jinghu line

495 km

22

CRH2A CRH5A

Chongqing-Chengdu

Chengyu line & Dacheng line

315 km

22

CRH1A

Beijing-Shanghai

Jinghu line

1454 km

18

CRH1E CRH2E

Wuhan-Nanchang

Wujiu line & Changjiu PDL

337 km

16

CRH2A

Shijiazhuang-Zhengzhou

Jingguang line

412 km

14

CRH2A

3.5.2 CRH Service on High Speed Lines The following table lists the frequency of CRH service on 14 HSR lines as of October 26, 2010. In some cases, CRH trains must still share the HSR lines with slower, non-high speed trains, which are not listed in the table. China's first HSR, the Qinshen PDL services as part of the Jingha Railway. Travel time Trains per day (By fastest (aggregation of train) both directions)

Line (route)

Length (main line)

Designed speed

Trains in service

Wuguang PDL (Wuhan-ChangshaGuangzhou)

968 km

3h 14m

180

350 km/h

CRH2C CRH3C

Huhang PDL (Shanghai-Hangzhou)

169 km (Shanghai Hongqiao – Hangzhou)

45min

160

350 km/h

CRH1A/B/E CRH2A/B/C/E CRH3C CRH380A

Huning PDL (Shanghai-Nanjing)

296 km (Shanghai Hongqiao – Nanjing)

1h 13min

174

350 km/h

CRH1A/B CRH2A/B/C CRH3C CRH380A

Jingjin ICL (Beijing-Tianjin)

117 km

30min

152

350 km/h

CRH3C

Zhengxi PDL (Zhengzhou-Xi'an)

456 km

1h 57min

18

350 km/h

CRH2C

Yongtaiwen PFL (Ningbo-Taizhou-Wenzhou)

268 km

1h 13min

58

250 km/h

CRH1B/E CRH2A/B/E

Wenfu PFL (Wenzhou-Fuzhou)

298 km

1h 26min

44

250 km/h

CRH1A/B/E CRH2A/B/E

Shitai PDL (Shijiazhuang-Taiyuan)

190 km (Shijiazhuang North–Taiyuan)

1h 6min

26

250 km/h

CRH5A

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Fuxia PFL (Fuzhou-Xiamen)

275 km

1h 21min

114

250 km/h

CRH1A/B/E CRH2A/E

Changjiu ICL (Nanchang-Jiujiang)

135 km

45min

38

250 km/h

CRH1A CRH2A

Hewu PFL (Hefei-Wuhan)

351 km

1h 58min

20

250 km/h

CRH1A/B CRH2A/B

Jiaoji PDL (Qingdao-Jinan)

362 km

2h 13min

42

250 km/h

CRH2A CRH5A

Hening PFL (Hefei-Nanjing)

156 km

54min

24

250 km/h

CRH1A/B CRH2A/B

Chengguan PDL (Chengdu-Guanxian)

67 km

30min

44

250 km/h

CRH1A

3.6 Rolling Stock, Order and Delivery Timetables China Railway High-speed runs different electric multiple units (EMUs), i.e. train sets, the designs of which all are imported from other nations and given the designations CRH-1 through CRH-5. CRH train sets are intended to provide fast and convenient passenger travels between cities. Some of the train sets are manufactured locally through technology transfer, a key requirement in exchange for China’s huge railway market. The signalling, track and support structures, control software and station design are developed domestically, but with foreign elements as well, so the system as a whole could be called Chinese. China currently holds many new patents related to the internal components of these train sets since they have re-designed major components so the trains can run at a much higher speed than the original foreign train designs.

A 16-car CRH1 train set in Shenzhen

CRH3’s 1st class car on Beijing-Tianjin Intercity

CRH service on Shanghai–Nanjing HSR

A CRH380A train on Shanghai-Hangzhou HSR

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



  





CRH1 produced by Bombardier Sifang (Qingdao) Transportation Ltd. (BST), CRH1A & CRH1B, nickname of "Metro" or "Bread", derived from Bombardier Regina; CRH1E, nickname "Lizard", is Bombardier's ZEFIRO 250 design. - CRH1A, train sets consists of 8 cars, maximum operation speed of 250 km/h. - CRH1B, a modified 16-car version, maximum operation speed of 250 km/h. - CRH1E, a 16-car high-speed sleeper version, maximum operation speed of 250 km/h. CRH2, nickname "Hairtail", derived from E2 Series 1000 Shinkansen. - CRH2A, a modified version of the Japanese Shinkansen E2-1000 series. - CRH2B, a modified 16-car version of CRH2, maximum operation speed of 250 km/h. - CRH2C (Stage one), modified version of CRH2, maximum operation speed up to 300 km/h by replacing two intermediate trailer cars with motored cars. - CRH2C (Stage two), a modified version of CRH2C (Stage one version), maximum operation speed up to 350 km/h by replacing motors with more powerful ones. - CRH2E, a modified 16-car version of CRH2 with sleeping cars. CRH3C, nickname "Rabbit", derived from Siemens Velaro, 8-car train sets, maximum operation speed of 350 km/h. CRH5A, nickname "French donkey", derived from Alstom Pendolino ETR600, 8 car train sets, maximum operation speed of 250 km/h. CRH380A, maximum operating speed of 380 km/h, manufactured by CSR Sifang Locomotive and Rolling Stock, in service in 2010. - CRH380A, 8-car version. - CRH380AL, 16-car version. CRH380B, upgraded version of CRH3, maximum operation speed of 380 km/h, manufactured by CNR’s Tangshan Railway Vehicle & Changchun Railway Vehicles, planned to be in service in 2010. - CRH380B, 8-cars version. - CRH380BL, 16-cars version. CRH380C, also named Zefiro 380, maximum operation speed of 380 km/h, manufactured by Bombardier Sifang (Qingdao) Transportation Ltd. (BST), planned to be in service in 2012. - CRH380C, 8-cars version. - CRH380CL, 16-cars version.

CRH1A,B,E, CRH2A,B,E, and CRH5A are designed for operation speed of 200 km/h and up to 250 km/h. CRH3C and CRH2C designs have operation speed of 300 km/h and up to 350 km/h, with a top design speed of over 380 km/h. Chinese CRH Train Sets and Years in Service Designation

Top speed in test

Designed Speed

Seating Capacity

Formation

Power (under 25 kV)

Enter Service

CRH1A

278 km/h

250

668 or 611 or 645

5M3T

5’300 kW

2007

CRH1B

292 km/h

250

1’299

10M6T

11’000 kW

2009

250

618

10M6T

11’000 kW

2009

CRH1E CRH2A

278 km/h

250

588 or 610

4M4T

4’800 kW

2007

CRH2B

275 km/h

250

1’230

8M8T

9’600 kW

2008

CRH2C Stage 1 394.2 km/h

300

610

6M2T

7’200 kW

2008

CRH2C Stage 2

350

610

6M2T

8’760 kW

2010

CRH2E

250

630

8M8T

9’600 kW

2008

350

556 or 600

4M4T

8’800 kW

2008

250

586 or 622

5M3T

5’500 kW

2007

CRH3C

394.3 km/h

CRH5A CRH380A

416.6 km/h

380

494

6M2T

9’600 kW

2010

CRH380AL

486.1 km/h

380

1’027

14M2T

20’440 kW

2010

380

unknown

4M4T

9’200 kW

2011 (plan)

380

1’004

8M8T

18’400 kW

2010 (plan)

CRH380B CRH380BL

457 km/h

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CRH380D

380

664

5M3T

10’000 kW

2012 (plan)

CRH380DL

380

1’336

10M6T

20’000 kW

2012 (plan)

CRH6

220

unknown

4M4T

unknown

2011 (plan)

Chinese CRH Train Sets Order Timetable Date of Order Oct 10, 2004

Supplier Alstom CNR Changchun

Oct 12, 2004 Oct 20, 2004

BST Kawasaki CSR Sifang

May 30, 2005

BST

June 2005

CSR Sifang

Nov 20, 2005

Siemens CNR Tangshan

Speed Level

Designation

Quantity (set)

Quantity (car)

250 km/h

CRH5A

3

24

57

456

250 km/h

CRH1A

20

160

250 km/h

CRH2A

3

24

57

456

250 km/h

CRH1A

20

160

300 km/h

CRH2C Stage one

30

240

350 km/h

CRH2C Stage two

30

240

350 km/h

CRH3C

3

24

57

456

CRH1B

20

320

CRH1E

20

320

Amount 620 million ERU 350 million USD 9’300 million RMB 350 million USD 8’200 million RMB 13’000 million RMB

Oct 31, 2007

BST

250 km/h

Nov 2007

CSR Sifang

250 km/h

CRH2B

10

160

1’200 million RMB

Nov 2007

CSR Sifang

250 km/h

CRH2E

6

96

900 million RMB

Dec 6, 2008

CSR Sifang

250 km/h

CRH2E

14

224

2’100 million RMB

Sep 23, 2009

CNR Changchun

250 km/h

CRH5A

30

240

4’800 million RMB

380 km/h

CRH380BL

70

1’120

30

480

Mar 16, 2009

CNR Tangshan CNR Changchun

1’000 million ERU

39’200 million RMB

CRH380A

40

320

CRH380AL

100

1’600

CRH380C

20

160

CRH380CL

60

960

CRH380B

40

320

CRH380BL

40

640

350 km/h

CRH3C

20

160

3’920 million RMB

BST

250 km/h

CRH1A

40

320

5’200 million RMB

Sep 14, 2010

CSR Sifang

250 km/h

CRH2A

20

160

3’400 million RMB

Oct 13, 2010

CNR Changchun

250 km/h

CRH5A

20

160

2’700 million RMB

880

10’000

Sep 28, 2009

CSR Sifang

380 km/h

Sep 28, 2009

BST

380 km/h

Sep 28, 2009

CNR Changchun

380 km/h

Sep 28, 2009

CNR Tangshan

July 16, 2010

Total

45’000 million RMB 27’400 million RMB 23’520 million RMB

Chinese CRH Train Sets Delivery Timetable (Based on data published by Sinolink Securities, some small changes were made according to the most recent news.) Designation

2006

2007

2008

2009

2010 (plan)

2011 (plan)

CRH1A

8

18

12

2

20

20

CRH2A

19

41 29

4

CRH5A

27

2012-2014 (plan)

Total 80

15

5

80

30

20

110

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CRH1B

4

CRH1E

9

7

3

8

20 9

10

10

CRH2E

6

14

CRH2C

10

20

30

60

CRH3C

7

36

37

80

20

CRH380A

40

CRH380AL

6

CRH380BL

40 94

CRH380B 11

100

20

20

40

49

80

140

20

20

CRH380C CRH380CL

 

20

CRH2B

60

60

Total

27

86

78

88

204

217

180

880

accumulate

27

113

191

279

483

700

880

880

all CRH380B contracts to be delivered before 2012 all CRH380C contracts to be delivered before 2014

3.7 Track Technology Many of the Passenger Dedicated Lines use ballastless tracks, which allow for smoother train rides at high speeds and can withstand heavy use without warping. The ballastless track technology, imported from Germany, carries higher upfront costs while reduces maintenance costs. Typical Application of Track Technology in China High Speed Lines Type

Classify

Technology

Line

CRTSIs

slab track

RTRI, Japan

Hada PDL

CRTSIIs

slab track

Max Bögl, Germany

Jingjin ICL

CRTSIIIs

slab track

CRCC,China

Chengguan PDL

CRTSIb

ballastless track

Rail.one, Germany

Wuguang PDL

CRTSIIb

ballastless track

Züblin, Germany

Zhengxi PDL

3.8 Maglev High Speed Rail China has only one maglev high-speed train line in operation: The Shanghai Maglev Train (上海磁浮示范运营 线), a turnkey Transrapid maglev demonstration line 30.5km long. The trains have a top operational speed of 430 km/h and can reach a top non-commercial speed of 501 km/h. It has shuttled passengers between Shanghai's Longyang Road Metro Station and Shanghai Pudong International Airport since March, 2004. Service was briefly interrupted by an electrical fire in 2006. Shanghai authorities have been trying without success to extend the 30.5 km maglev line. An intercity link with Hangzhou was approved by the central government in 2006, but construction was postponed. Work on a shorter extension to Shanghai Hongqiao International Airport was also stalled. With the opening of Shanghai-Hangzhou High Speed Railway on October 26, 2010, the original plan of constructing the maglev intercity link between Shanghai and Hangzhou, which was newly approved in March 2010, does not look like going to happen in the near future.

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3.9 The Fastest Trains in China The "fastest" train commercial service can be defined alternatively by a train's top speed or average trip speed. 

 

The fastest train service measured by peak operational speed is the Shanghai Maglev Train which can reach 431 km/h. Due to the limited length of the Shanghai Maglev track (30 km), the maglev train's average trip speed is only 245.5 km/h. The Shanghai Maglev also holds the record for the top speed in tests of 501 km/h. The fastest train service measured by average trip speed is on the Wuhan-Guangzhou High-Speed Railway, where the CRH3/CRH2 coupled-train sets average 312.5 km/h on the 1’069 km route from Wuhan to Guangzhou North. It is the fastest commercial train service in the world. The top speed attained by a non-maglev train in China is 486.1 km/h by a first China-designed high speed train CRH380AL (16-car train set) on the Beijing-Shanghai High-Speed Railway during the test run on December 03, 2010.

Speed records of China’s rolling stock (non-maglev) Date

Train

Type

Track

Speed

1997-01-05

SS8 (Note 1)

Electric locomotives

Beijing Circular Railway

212.6 km/h

1998-06-24

SS8 (Note 2)

Electric locomotives

Jingguang Line

240 km/h

Guangshen Line

200 km/h

Guangshen Line

223 km/h

1998-07-29 X2000 "New Speed" Electric Multiple Unit (EMU) 1999-09

DDJ1 "White Shark"

EMU

1999-10-01

NZJ1 "New Aurora"

Diesel Multiple Unit (DMU)

Huning line

194 km/h

2000-11

DJJ1 "Blue Arrow"

EMU

Guangshen Line

235 km/h

2001-11-11

DJF2 "Pioneer"

EMU

Guangshen Line

249.6 km/h

2002-09-10

DJF2 "Pioneer"

EMU

Qinshen PDL

292.8 km/h

2002-11-27

DJJ2 “China Star”

EMU

Qinshen PDL

321.5 km/h

2002-12-09

NZJ2 "Shenzhou"

DMU

Qinshen PDL

210.7 km/h

2008-04-24

CRH2C (Note 3)

EMU

Jingjin ICL

370 km/h

2008-06-24

CRH3C (Note 4)

EMU

Jingjin ICL

394.3 km/h

2009-12-09

CRH3C (Note5)

EMU

Wuguang PDL

394.2 km/h

2010-09-28

CRH380A (Note 6)

EMU

Huhang PDL

416.6 km/h

2010-12-03

CRH380AL (Note 7)

EMU

Beijing–Shanghai High Speed Railway

486.1 km/h

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Notes: 1. SS8 locomotive with two passenger carriages 2. SS8 locomotive with five passenger carriages. It remains the recordholder for Chinese electric locomotives. 3. CRH2-061C 4. CRH3-001C 5. The pair of CRH3 EMUs (CRH3-013C+CRH3-017C) also set a world record for double-link EMUs. 6. The CRH380A-6001 also holds the record for shorter length Chinese EMUs. 7. The CRH380A-6041L also holds the record for extended length Chinese EMUs.

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4. MASS RAIL TRANSIT 4.1 Overview Mass rail transit (MRT) in China encompasses a broad range of urban and suburban electric passenger rail mass transit systems including subway, light rail, tram and even maglev. The first subway in China was built in Beijing in 1969. The Tianjin Metro followed in 1984. China’s largest urban metro system is located in Shanghai which is also the longest network in the world, where the first metro line opened in 1995. Hong Kong’s MTR was developed autonomously by the city-state. The MTR now has investment and management stakes in the rapid transit systems of several mainland Chinese cities. Since 2000, the growth of MRT systems in Chinese cities has been accelerated. From 2009 to 2015, China plans to build 87 mass rail transit lines, totaling 2,500 km, in 25 cities at the cost of $150 (¥1 trillion). MRT construction projects in China are approved by Chinese central government while the construction and management are executed by the state-owned metro corporations under the local commissions of the Ministry of Construction.

Map of Greater China Cities with Mass Rail Transit Systems

4.2 Key Data of MRT Systems in China List of Mass Rail Transit systems (MRT) in China by Network Length (Transit systems with light blue background are not yet operational but under construction.) (Transit systems with dark blue background are in the planning stage.) Lines Number Network Began in of Length Oper. Oper. Stations (km)

Daily ridership

MRT System

Chinese Name

Abbrev.

City

Shanghai Metro

上海轨道交通 （上海地铁）

SHM

Shanghai

1995

12

233

423

7.08 million

Beijing Subway

北京地铁

BJS

Beijing

1971

9

126

228

5.63 million

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Guangzhou Metro

广州地铁

Hong Kong Mass Transit Railway

港铁

GZMTR Guangzhou MTR

1999

6

107

205

7.84 million

Hong Kong 1910*

10

85

175

3.76 million

Nanjing Metro

南京地铁

NJM

Nanjing

2005

2

55

87

0.51 million

Beijing Suburban Railway

北京市郊铁路

BCR

Beijing

2008

1

6

77

20’000

Shenzhen Metro

深圳地铁

SZM

Shenzhen

2004

2

25

22

0.63 million

Dalian Metro

大连轨道交通 （大连地铁）

DLM

Dalian

2003

1

18

64

Changchun Light Rail Transit

长春轻轨

CLRT

Changchun

2001

2

48

52

Tianjin Binhai Mass Transit

濱海快速

BMT

Tianjin

2004

2

24

42

Wuhan Metro

武汉轨道交通 （武汉地铁）

WHM

Wuhan

2004

1

27

27

Shenyang Metro

沈阳地铁

SYM

Shenyang

2010

1

22

27

Tianjin Metro

天津地铁

TJM

Tianjin

1984

2

26

22

Chongqing Rail Transit

重庆轨道交通

CRT

Chongqing

2005

1

18

19

Chengdu Metro

成都地铁

CDM

Chengdu

2010

1

16

18

FMetro

佛山地铁

FM

Foshan

2010

1

14

20

Guangzhou, Foshan, 广珠城际轨道交通 GZIMRT Jiangmen, 2011 （广珠城轨） Zhongshan, Zhuhai

1

27

142

Guangzhu Intercity Mass Rapid Transit Hangzhou Metro

杭州轨道交通

HZM

Hangzhou

2011

Xi'an Metro

西安地鐵

XAM

Xi'an

2011

Harbin Metro

哈尔滨地铁

HRBM

Harbin

2012

Suzhou Subway

苏州轨道交通

SZS

Suzhou

2012

Kunming Rail Transit

昆明地铁

KMRT

Kunming

2012

Zhengzhou Subway

鄭州地鐵

ZZS

Zhengzhou

2013

Nanchang Rail Transit

南昌轨道交通

NCRT

Nanchang

2014

Ningbo Rail Transit

宁波轨道交通

NBRT

Ningbo

2014

Qingdao Metro

青岛地铁

QDM

Qingdao

2014

Changsha Metro

长沙地铁

CSM

Changsha

2015

Wuxi Metro

无锡轨道交通

WXM

Wuxi

2015

Fuzhou Metro

福州轨道交通

FZM

Fuzhou

2015

Ürümqi Light Rail Transit

乌鲁木齐轻轨

ULRT

Ürümqi

2015

Dongguan Metro

东莞轨道交通

DGM

Dongguan

2015

Nanning Rail Transit

南宁轨道交通

NNRT

Nanning

2015

Hefei Metro

合肥地铁

HFM

Hefei

2015

Guiyang Urban Rail Transit

贵阳轨道交通

GURT

Guiyang

2017

Macau Light Rail Transit

澳門輕軌系統

MLRT

Macau

2013

Taiyuan Metro

太原地铁

TYM

Taiyuan

20xx

Changzhou Metro

常州地铁

Changzhou

20xx

Datong Metro

大同地铁

Datong

20xx

Huizhou Metro

惠州地铁

Huizhou

20xx

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Hohhot Metro

呼和浩特地铁

Hohhot

20xx

Jiaxing Metro

嘉兴地铁

Jiaxing

20xx

Jinan Metro

济南地铁

Jinan

20xx

Lanzhou Metro

兰州地铁

Lanzhou

20xx

Nanning Metro

南宁地铁

Nanning

20xx

Quanzhou Metro

泉州地铁

Quanzhou

20xx

Shijiazhuang Metro

石家庄地铁

Weifang Metro

潍坊地铁

Weifang

20xx

Wenzhou Metro

温州地铁

Wenzhou

20xx

Xiamen Metro

厦门地铁

Xiamen

20xx

Xuzhou Metro

徐州地铁

Xuzhou

20xx

Zibo Metro

淄博地铁

Zibo

20xx

Shijiazhuang 20xx

Notes:       

Lines in operation include the number of main lines only. Every interchange station/stations connected by transfers are counted as a single station, unless otherwise noted. Network length refers to track length, shared track between lines are counted once only. The Shanghai Metro is the longest network in the world. See David Barboza "Expo Offers Shanghai a New Turn in the Spotlight". http://www.nytimes.com/2010/04/30/world/asia/30shanghai.html, retrieved on April 29, 2010. The first line of the Beijing Subway was completed in 1969 but did not open for trial operation until 1971 and it was restricted to riders with credential letters. The subway was fully opened to the public without credential letters in 1981. When the MTR opened in 1910 as the (KCR) while the pre-merged MTR open on 1979, Hong Kong was not part of China. The system was electrified in 1983 and merged with the (九广铁路) in 2007. The Tianjin Metro closed down for upgrades in 2001 and reopened in 2006.

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5. MARKET PLAYERS 5.1 Key Chinese Railway Enterprises Chinese railway enterprises develop at a dramatic speed in recent years. The large Chinese railway players are all state/owned and state-backed. The manufacturers of railway equipment and systems have been separated from the national railway operators under the control of the MoR. At present, the key Chinese railway enterprises are under the supervision of the State-owned Assets Supervision and Administration Commission of the State Council (国务院国有资产监督管理委员会).

China Railway Group Ltd. (CREC) 中国中铁股份有限公司 or China Railway Engineering Corporation 中 国铁路工程总公司 www.crec.cn

The corporation runs a spectrum of businesses covering surveying and designing, construction and installation, manufacturing, research and development, technical consulting, capital management as well as international business activities. Its headquarter is in Beijing. CREC is the third largest civil construction enterprise in the world, and the largest railway, road and tunnel construction contractor in China and Asia. It is in a leading position in China's construction market, and participated in many large scale infrastructure projects abroad (especially in countries of Southeast Asia and Africa). Fortune magazine in the United States reported that CREC ranked 342 in the 500 world's largest enterprises in 2007. CREC consists of 31 entities including: - 16 large construction enterprises                

China National Overseas Engineering Corporation China Railway Resources Co., Ltd. China Railway First Group Corporation China Railway Erju Group Corporation (China Railway Second Group Corporation) Third Engineering Group Co. Ltd. China Tiesiju Civil Engineering Group Co. Ltd. (China Fourth Group Civil Engineering Group Co. Ltd.) China Railway Wuju Group Corporation (China Railway Fifth Group Corporation) China Railway Sixth Group Co. Ltd. China Railway Seventh Group Co. Ltd. China Railway Eighth Civil Engineering Group Corporation China Railway No. 9 Group Co. Ltd. China Railway No. 10 Group Corporation China Zhongtie Major Bridge Engineering Group Co. Ltd. (China Railway Major Bridge Engineering Group Co. Ltd.) China Railway Tunnel Group China Railway Electrification Bureau Co. Ltd. China Railway Construction Engineering Group

- 3 large surveying and designing enterprises

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  

Second Survey and Design Institute of China Railway China Railway Engineering Consultants Group China Major Bridge Survey and Design Institute

- 3 R&D enterprises   

Northwest Research Institute Southwest Research Institute of CREC Engineering Machinery Research and Design Institute

- 5 manufacturing enterprises     

China Railway Shanhaiguan Bridge Group Co. Ltd. China Railway Turnout Bridge Inc. China Railway Bus. Co. Ltd. Wuhan Engineering Machinery Works of CREC Hengping Trust and Investment Co. Ltd.

In addition, there are 17 subsidiaries and 4 Postdoctor Workstations directly run by the headquarter. CREC's construction teams are found in over 1,000 cities throughout China except Taiwan.

China Railway Construction Corporation Ltd. (CRCC) 中国铁道建筑股份有限公司 or China Railway Construction Corporation 中国铁道建筑总公司 www.crcc.cn

Formerly the railway arm of the People's Liberation Army, CRCC is the second largest state-owned construction enterprise in China. With its headquarter in Beijing, it is engaged in construction contracting, surveying, designing, research and development, industrial manufacturing, consultation, real estate, capital operation and logistics. It is currently one of China's largest and the world's sixth largest construction contractor. CRCC consists of 32 enties including:                 

China Civil Engineering Construction Co. Ltd. China Railway 11th Bureau Group Co., Ltd. China Railway 12th Bureau Group Co., Ltd. China Railway 13th Bureau Group Co., Ltd. China Railway 14th Bureau Group Co., Ltd. China Railway 15th Bureau Group Co., Ltd. China Railway 16th Bureau Group Co., Ltd. th China Railway 16 Bureau Group Co., Ltd. th China Railway 17 Bureau Group Co., Ltd. th China Railway 18 Bureau Group Co., Ltd. th China Railway 19 Bureau Group Co., Ltd. China Railway 20th Bureau Group Co., Ltd. China Railway 21th Bureau Group Co., Ltd. China Railway 22th Bureau Group Co., Ltd. China Railway 23th Bureau Group Co., Ltd. China Railway 24th Bureau Group Co., Ltd. China Railway 25th Bureau Group Co., Ltd.

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           

Zhong Tie Construction Group Co., Ltd. China Railway Construction Electrification Bureau Group Co., Ltd. China Railway Construction Group Co., Ltd. st The 1 Survey and Design Institute of Chinese Railways Co., Ltd. China Railway Siyuan Survey and Design Group Co., Ltd. China Railway Wuyuan Survey and Design Group Co., Ltd. China Railway Design Group Co., Ltd. Beijing TIECHEN Construction Consultant Co., Ltd. China Railway Related Material Group Co., Ltd. China Railway Large Maintenance Machinery Co., Ltd. China Railway Track System Co., Ltd. China Railway Real Estate Group Co., Ltd.

China South Locomotive and Rolling Stock Corporation Limited (CSR) 中国南车股份有限公司 www.csrgc.com.cn formerly known as China South Locomotive and Rolling Stock Industry (Group) Corporation

In 1986, the China National Railway Locomotive & Rolling Stock Industry Corporation (LORIC) was formed, comprising 35 production sites and 4 research centres. In 2002, LORIC was separated from the MoR and China South Locomotive and Rolling Stock Industry (Group) Corporation (CSRG) was formed. Its main competitor, the China North Locomotive and Rolling Stock Industry (Group) Corporation was formed two years earlier in 2000. In 2002, the group manufactured the 270 km/h China Star high speed EMU at its Zhuzhou Electric Locomotive Works in Zhuzhou of Hunan Province – the so-called “China’s Cradle of Electric Locomotives”. In 2007, China South Locomotive & Rolling Stock Corporation Limited (CSR) was formed. The company's H shares were first traded on the Hong Kong stock market on 21 August 2008, the company's A shares also began trading on August 18, 2008 on Shanghai Stock Exchange. $1.57 billion was raised in the share offers. 40% stake in the company was offered in total on the two exchanges. Between 2004 and 2007 CSR had about 50% of the internal Chinese market for locomotives and around 80% of the market for electric multiple units (by volume), as well as 50% market share in locomotive and wagon refurbishment. In the same period overseas sales accounted for about 7-8% of revenue. CSR is the world’s largest manufacturer of electric locomotives and rolling stock today. CSR consists of 16 subsidiaries including:             

CSR Yangtze Rolling Stock Co., Ltd. CSR Zhuzhou Electric Locomotive Co., Ltd. CSR Ziyang Locomotive Co., Ltd. CSR Qishuyan Locomotive Co., Ltd. CSR Sifang Locomotive & Rolling Stock Co., Ltd. CSR Sifang Rolling Stock Co., Ltd. CSR Nanjing Puzhen Rolling Stock Co. Ltd. CSR Meishan Rolling Stock Co., Ltd. CSR Chengdu Locomotive & Rolling Stock Co., Ltd. CSR Feb. 7th Rolling Stock Co., Ltd. CSR Shijiazhuang Rolling Stock Co., Ltd. CSR Investment & Leasing Co., Ltd. CSR Zhuzhou Electric Locomotive Research Institute Co., Ltd.

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  

CSR Qishuyan Locomotive & Rolling Stock Technology Research Institute Co., Ltd. CSR Luoyang Electric Locomotive Co., Ltd. CSR (Hong Kong) Co. Ltd.

CSR has 2 Joint Ventures:  

Bombardier Sifang (Qingdao) Transportation Ltd. Qingdao Sifang Kawasaki Rolling Stock Technology Co., Ltd.

China North Locomotive and Rolling Stock Corporation Limited (CNR) 中国北车股份有限公司 or China CNR Corporate Limited 中国北车集团 www.chinacnr.com, formerly known as China North Locomotive and Rolling Stock Industry (Group) Corporation

In 2000, the China Northern Locomotive & Rolling Stock Industry (Group) Corporation (also known as China Beiche Group) was formed from China National Railway Locomotive & Rolling Stock Industry Corporation (LORIC) which was comprised of 35 production sites and 4 research centres. Its main competitor, the China South Locomotive and Rolling Stock Industry (Group) Corporation was formed two years later in 2002. In 2008, the group was reorganised into the China North Locomotive and Rolling Stock Corporation Limited (or China CNR Corporation Limited) with a minority shareholding contributed by China ChengTong Holdings Group and China Huarong Asset Management Corp. The company made an IPO of $2 billion in 2009 on the Shanghai Stock Exchange. CNR consists of 20 subsidiaries including:                    

Qiqihar Railway Rolling Stock Co., Ltd. Harbin Railway Rolling Stock Co., Ltd. Changchun Railway Coach Co., Ltd. Changchun Railway Vehicle Co., Ltd. CNR Dalian Locomotive & Rolling Stock Co., Ltd. Tangshan Railway Vehicle Co., Ltd. Tangshan Railway Transportation Equipment Co., Ltd. Tianjin LJ Railway Transport Equipment Ltd. Beijing Feb. 7th Railway Transportation Equipment Co., Ltd. Beijing Nankou Railway Transportation Machinery Co., Ltd. CNR Datong Electric Locomotive Co., Ltd. Taiyuan Railway Rolling Stock Co., Ltd. Yongji Xinshisu Electric Equipment Co., Ltd. Ji’nan Railway Rolling Stock Co., Ltd. Xi’an Railway Rolling Stock Co., Ltd. Lanzhou Jinniu Railway Transportation Equipment Co., Ltd. CNR Dalian Locomotive Research Institute Co., Ltd. Qingdao Sifang Rolling Stock Research Institute Co., Ltd. CNR Logistic Development Corp., Ltd. LORIC Import & Export Corp., Ltd.

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China Railway Signal & Communication Corporation (CRSC) 中 国 铁 路 通 信 信 号 集 团 公 司 www.crsc.cn

CRSC was originated from 1953. The earliest founding of the CRSC’s factory can be traced back to100 years ago. As a large group in the rail transit communication and signal industry, CRSC is active in research & development, design, manufacturing and installation. With its strength of system integration and turn-key projects, CRSC is now expanding its business from railway signal & communication to transportation information and control integration in different sectors of mainline railway, mass rail transit, seaports, airports and highways. The products and services of CRSC are sold not only in China, but also in more than 20 countries and regions in the world. It is one of the biggest suppliers of rail traffic control system in China. CRSC has established joint ventures and laboratories with partners home and abroad. The most successful example is the Chinese-American Signal Company (CASCO) in Shanghai joined by General Railway Signal Company (GRS) in 1986, which produces products and systems for railways in China. GRS is now a part of Alstom Transport and no longer an independent company. CRSC has 12 subsidiaries and 9 manufacturing sites including:                     

Beijing National Railway Research and Design Institute of Signal and Communication China Railway Signal & Communication Shanghai Engineering Co., Ltd. Beijing Nera Stentofon Communication Equipment Co., Ltd. CASCO Signal Ltd. CRSC Shanghai Rail Transport Engineering R&D Center CRSC Beijing GUOTIE Urban Rail Engineering Co., Ltd. Beijing Railway Signal and Communication Whole-Set Equipment Corporation Beijing LUYANG Signal and Communication Corporation Beijing GUOTIE HUACHEN Signal and Communication Technology Corporation Beijing Modern Signal and Communication Engineering Consultant Corporation Zhongxin Diantong Co., Ltd. CRSC Beijing Dianwu Technology Development Center Beijing Railway Signal Factory Shenyang Railway Signal Factory Xi’an Railway Signal Factory Tianjin Railway Signal Factory Shanghai Railway Communication Factory Beijing Feb. 7th Communication Factory Chengdu Railway Communication Equipment Factory Jaiozuo Railway Cable Factory Tianshui Railway Cable Factory

5.2 Chinese Railway Academy, R&D Institutions and Universities China has very strong railway R&D resources due to its long history and continuous efforts on R&D and design institutions as well as on higher education of railway science and technology. There is no other country in the world that has as many railway academy, R&D institutions and universities as China has, and they are all state-owned. Almost all the R&D institutions in China also function as commercial entities and are able to conduct business deals. All of them undertake different R&D and engineering projects, even production jobs assigned by the MoR. They are cooperation partners in some projects while competitors in others.

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5.2.1 Major Chinese Railway Academy and R&D Institutions China Academy of Railway Sciences (CARS) 中国铁道科学研究院 cars.rails.com.cn in Beijing is the main advisor of railway science and technology for the MoR. CARS consists of R&D institutes and centers that are specialized in all kinds of railway technologies.

Other major railway R&D institutions, as listed above, are either under CREC, CRCC, CSR, CNR, CRSC in China.          

The 1st Railway Survey and Design Institute 铁道第一勘察设计院 in Xi'an of Shanxi Province. nd The 2 Railway Survey and Design Institute 铁道第二勘察设计院 in Chengdu of Sichuan Province. The 3rd Railway Survey and Design Institute 铁道第三勘察设计院 in Tianjin of Hebei Province. The 4th Railway Survey and Design Institute 铁道第四勘察设计院 in Wuhan of Hubei Province. The 5th Railway Survey and Design Institute 铁道第五勘察设计院 in Beijing. CSR Zhuzhou Electric Locomotive Research Institute CSR 株洲电力机车研究所 in Zhuzhou of Hunan Province. CSR Qishuyan Locomitive & Rolling Stock Technology Research Institute CSR 戚墅堰机车车辆工艺 研究所 in Qishuyan of Jiansu Province CSR State Engineering Research Center of Converters CSR 株洲变流技术国家工程研究中心 in Zhuzhou of Hunan Province. CSR State Engineering Laboratory of High Speed Train System Integration CSR 高速列车系统集成 国家工程实验室 in Qingdao of Shandong Province. CRSC Beijing National Railway Research and Design Institute of Signal and Communication CRSC 北京全路通信信号研究设计院 in Beijing.

5.2.2 Major Chinese Railway Universities Before the education reform in China during 2000–2003, similar to other sectors in China, all the railway universities were under the supervision of the MoR. After the education reform, the names of the universities were changed and they were combined with other universities in China and are now under the supervision of the Ministry of Education.       

Beijing Jiaotong University 北京交通大学 in Beijing (former "Northern Jiaotong University") Tongji University 同济大学 in Shanghai (former "Shanghai Railway University") Central South University 中南大学 in Changsha (former "Changsha Railway University") Lanzhou Jiaotong University 兰州交通大学 in Lanzhou (former "Lanzhou Railway University") Dalian Jiaotong University 大连交通大学 in Dalian (former "Dalian Railway University") Southwest Jiaotong University 西南交通大学 in Chengdu East China Jiaotong University 华东交通大学 in Nanchang

The universities in China that have railway related colleges and departments, in many cases, serve as specialized R&D institutions and undertake R&D projects assigned by the MoR. These specialized R&D centers or laboratories are designated by the state but supported and managed by the universities. 

State Key Laboratory of Rail Traffic Control and Safety 轨道交通控制与安全国家重点实验室 affiliated to Beijing Jiaotong University.

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

State Key Laboratory of Traction Power 牵引动力国家重点实验室 affiliated to Southwest Jiaotong University.

5.2.3 China Railway Society China Railway Society 中国铁道学会 is a national institution of railway science and technology funded by Chinese government. It collects well-established and influential railway specialists stepping back in the railway sector. Its main tasks are:       

Developing programs of academic exchanges including seminars, investigation and study tours. Strengthening ties with international academic personnel and institutions by organizing international conferences, lectures and exhibitions as well as overseas study and training tours. Organizing technology and science exchange activities and continuation of education. Providing technical consultancy including proposals on policy-making, research and development, technology transfer and technical services. Doing the appraisals on research results and to offer certifications of technical qualifications as well as to work on technical policy and standards as entrusted by relevant government departments. Publishing railway periodicals, books and papers in accordance with relevant regulations. Issuing recognitions and rewards to achievements in railway science and technology and to technical personnel who have made outstanding accomplishments in the field of railway science and technology; giving recommendation of railway talents as approved by the relevant government departments.

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6. MARKET ENTRY HURDLES China is a huge potential market, and it is also a big difficulty. Overestimating it strategically is as unwise as underestimating it tactically. The last 2 years of worldwide economic difficulties have accelerated China’s relative importance and pushed it on the world scene. China has become the biggest car and wind power markets worldwide. From the fifth place, China jumped to the second market for Swiss machinery exporters, just after Germany. And it has become the most tempting railway supply market in the world. In the coming decade, more far-reaching changes will be seen worldwide, as China transforms its labour intensive production facilities into locally produced automation and home-grown technologies. For all international enterprises, big and small, this evolution will probably be the source of most opportunities as well as changes in the way how their business is done. China railway market has been developing at a very fast pace in recent years. Nevertheless, it remains a complicated and difficult market for the western companies. Apart from the general difficulties of trade barriers (tariff and non-tarrif) and complicated tax and accounting rules, competition is getting more and more intense in the market, especially from the Chinese competitors. Chinese Railways as the national railway operator is strictly under the control of the MoR, and all Chinese railway enterprises are state-owned and state-backed. Western companies have to realize that when they meet Chinese railway people they are facing Chinese government officials as well. In such a situation, time-consuming bureaucracy and corruption are not uncommon phenomena. The major challenges for Swiss companies, especially the railway suppliers, are being illustrated subsequently.

6.1 Intellectual Property No market is a safe place, so to speak, especially in a huge and sophisticated developing country like China. Intellectual property infringement is what concerns many foreign companies about China. However, a recent research study indicates that it is actually not any more a top concern of the western companies already operating in China. Since joining the World Trade Organization (WTO), China strengthened its legal framework and amended its IPR related laws and regulations to comply with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). In the IP field, the relevant Chinese authorities have done a lot to improve the legislation, with the release of the “National Strategy for Intellectual Property” in 2008 and the recent promulgation of new laws in different domains, e.g. the Patent Law. The aim of these rules is to guarantee a secure and trustworthy innovation environment as such measures barely existed before. Joint efforts have been made on IP protection by both the State Intellectual Property Office www.sipo.gov.cn and the Ministry of Commerce (MOFCOM) www.chinaipr.gov.cn. IP complaints can be made online both at the country level www.ipr.gov.cn, provincial (e.g. Guangdong Province: www.gdipo.gov.cn) and municipal (e.g. Guangzhou: www.gzipo.gov.cn) level. Despite stronger statutory measures, China still needs to do more to protect intellectual property rights mainly in the area of law enforcement. The Embassy of Switzerland in Beijing and the Consulates General in Shanghai and Guangzhou are in regular contact with Swiss companies doing business in China and offer their support to those having difficulties with the Chinese administration at different levels or with the tribunals. On May 29, 2007, a “Memorandum of Understanding of the Switzerland–China Joint Commission on Commerce and Trade on Establishing a Working Group on Intellectual Property” was signed between China and Switzerland. The discussions and cooperation of the Working Group are focused on    

Institutional aspects of intellectual property rights Legislative aspects of intellectual property rights Civil, administrative and criminal enforcement of intellectual property rights Technical assistance cooperation in intellectual property.

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Since the key strength of most Swiss companies is connected with IP, it is always wise to stay alert by taking protective measures, such as to limit IP knowledge to only a few reliable persons, to register patents and trademarks with the appropriate Chinese authorities, to set up wholly owned foreign enterprises (WOFEs) instead of joint ventures (JVs), and to consult experienced experts and lawyers when encountering IP issues. What is more important for staying in a successful position in the market, is development and innovation, i.e. try to keep the products of Swiss companies in the techonology forefront and spare no effort in innovation in the respective fields.

6.2 Licenses and Certification In China, it is mandatory to apply import licenses for purchasing mechanical and electrical equipment and systems manufactured in foreign countries, which is so-called “Ji Dian Shen” (机电审). The MoR www.chinamor.gov.cn is the right organization to submit such applications. The Ministry of Commerce (MOFCOM) www.mofcom.gov.cn is the authority that controls and monitors all the imported products, including issuing import licenses for mechanical and electrical equipment applied in the rail sector. The MoR, however, has been delegated by MOFCOM to issue import licenses for some of the railway-related mechanic and electronic products supplied by foreign manufacturers. China Customs www.customs.gov.cn is the right organization where people check and verify information such as import & export duties. Many foreign suppliers including Swiss companies received false information that they are supposed to have their products certified by Chinese authorities before they can be sold in the China railway market. It is important knowledge that the responsibility of applying import licenses lies with the Chinese buyers, i.e. the potential Chinese customers of foreign suppliers. It is also important knowledge that import licenses are required only for importing mechanical and electrical equipment by Chinese buyers. To apply import licenses for mechanical and electrical equipment and systems, Chinese railway buyers under the direct supervision of the MoR have only one channel, that is, to apply at the International Cooperation Department of the MoR. Other Chinese railway buyers, such as the locomotive and rolling stock manufacturers under CSR and CNR that are located in differents cities in China, can apply import licenses either at the MoR or at the relevant local authorities which is the Mechanical and Electrical Products Import and Export Division at the Bureau of Foreign Trade and Economy Cooperation (BOFTEC) of the municipalities. This is because, CSR and CNR are now under the direct supervision of the State-owned Assets Supervision and Administration Commission of the State Council, as mentioned before. Foreign companies supplying rail-related equipment and products planning to set up either WOFEs or JVs in China, are required to apply for approvals and business licences at the International Cooperation Department of the MoR.

6.3 Culture and Language 6.3.1 Culture Differences China is a rather special market compared with the western markets. It is normally necessary to take into consideration the geographical distance between Europe and China, as well as China’s vast territory and huge population. Chinese culture is quite diversified with its 56 ethnic groups which is very different from that of the western world. Consequently, Chinese business behaviors are also very different from those of the western markets. Actually, they are even different from region to region in China. Due to culture differences, Europeans normally find it difficult to communicate with Chinese. One of the frequently asked questions by Europeans is “Why I ask ten questions but cannot get one direct answer from the Chinese?” The simple answer to the question is that, traditional and educated Chinese prefer not to be too straightforward during communications and they always try to avoid confrontations. These behaviors are normally considered to be rude and impolite. “Harmony”, “good will” and “common interest” have been very

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much encouraged through the long history in China, while individualism and creative thinking are more encouraged in the western world. Swiss companies doing business or going to do business in China are recommended to get themselves more ready for the very different Chinese culture and business environment. Only when you are able to face them, could you grant yourself a chance to handle them. Your targets are to make business achievements and your chances are under your own control. According to a recent survey among Swiss companies in China, the flexibility to adapt to local customs, “Guanxi” (connections) and networking are among top success factors for foreign companies. For westerners, it is almost impossible to make a deal without having “Zhongjianren” (intermediary), and it is advisable to use a Chinese go-between for the meetings. In China, a person’s reputation and social standing rest on “Mianzi” (saving face). If westerners cause Chinese embarrassment or losing face, it can be a disaster for their business. In the huge and complex market of China, there are more risks in certain regions than others. For example, Shenzhen in Guangdong Province, a neighboring city of Hong Kong and a “fishing village” over twenty years ago, is a city of immigrants with the majority of its population migrated from the inland China. As an economic miracle in China, it has been developed into a modern industrial and financial city through China’s economic reform and opening-up to the world. Nevertheless, too many people in Shenzhen just want to make quick money and become rich overnight. Quite a few Swiss SMEs experienced scams in Shenzhen in the past years. Being approached by Chinese “buyers” and offered with “big orders”, the Swiss companies were so overwhelmed that they did whatever the Chinese “customers” ask them, such as paying notary fee for contracting or visiting them in China, etc. Some Swiss companies made payments without even knowing whether their low-price Chinese “suppliers” were mainland Chinese companies or Hong Kong companies, which could be easily checked out by an expert or insider from the legal papers provided. When faced with perplexity, few of the Swiss SMEs consulted experts or sought assistance from official representations of Switzerland working in China, i.e. Swiss Business Hub with local trade officers based in different cities in China who could help them avoid their mistakes. In most cases, the SBH heard from them only when they were already in troubles. It is our hope that more Swiss SMEs will try to prevent possible mistakes by seeking help from the experts and insiders before they make them. Lessons learnt by the Swiss SMEs indicate that handling business in China in a same way as what they do in the western markets will sooner or later put their businesses into troubles. It seems that they often forget that they are doing business in a long-distance, huge and different emerging market of China in another continent of Asia. Some Swiss SMEs could have avoided their mistakes if they would just take the normal legal measures in doing international business, e.g. by proper contracting and order-processing. In general, they should be more cautious in all developing markets including China.

6.3.2 Language Barrier Chinese is one of the most difficult languages in the world. There are four tunes for each Chinese character and many Chinese characters share one same pronunciation. The written Chinese has no relevance to the spoken Chinese indicated in “Pinyin”. When the name of a local Chinese company or the company address is provided only in Chinese Pinyin, it is simply impossible to convert them back into correct Chinese name and address in written. This means, it is alomost impossible to find or check back on a Chinese company in question if the written Chinese company name and address are not provided. Mainland China uses simplified written Chinese while Hong Kong, Macao and Taiwan use traditional written Chinese. If you know the differences between simplified and traditional Chinese, you can judge from the legal papers provided if the company in question is a mainland Chinese company or a company registered in Hong Kong or Macao. Europeans tend to underestimate the difficulties created by language barrier in China when they first start to approach the market. In many cases, without European business people realizing it, some unqualified translators can mislead important meetings and negotiations to such an extent that precious time in business is wasted and even commercial losses are made.

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Inspite of the fact that more and more Chinese are able to use English as a foreign language for communication, language remains a big issue for international suppliers to penetrate the market and to do business in China. Chinese mandarin is the only official language in China. An example of language barrier is that, the official website of the MoR is provided in Chinese only. The simple fact is that the majority of Chinese population still cannot communicate in English, especially in the inland cities.

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7. INSIGHTS FOR THE RAIL INDUSTRY 7.1 Impact of the Global Financial Crisis According to the comprehensive World Rail Market Study for UNIFE, the immediate fate of the rail industry depends on the world economy that is still recovering from the historic financial crisis. The mature economies that have been the industry’s main markets are expected to have slow economies with tight public spending limits, while the emerging economies are enjoying faster growth and their spendings on rail equipment are obviously rising. The financial crisis did not have a real severe impact on the rail industry, and the two-speed world economy is expected to have a big influence on public spending to which infrustructure investment is very much linked. Such a tendency can be evidently observed in China’s Economic Stimulus Program, compared with the “Midto-Long Term Railway Netwrok Plan” approved in 2006 and revised just before the outburst of the global financial crisis in 2008.

Chinese Railway Development Plans Total Operational Rail Network Passenger Dedicated High Speed Line (PDL)

China’s Mid-to-Long Term Railway Network Plan By 2010 By 2020

China’s Economic Stimulus Program By 2010

By 2020

90,000 km

120,000 km

100,000 km

180,000 km

7,000 km

16,000 km

18,000 km

25,000 km

In order to stimulate Chinese economy, the railway construction schedules have been substantially accelerated in China. China railway industry develops at an exceptional fast speed in the past two years, with plans to take the world’s leading position of high speed railway technology.

7.2 Changes and Trends Railway operators seperated from their equipment suppliers Traditionally, the infrastructure and rolling stock are owned and operated by the same company. This has often been by a national railway, while other countries have had private railways. Since the 1980s, there has been an increasing tendency to split up railway companies, with separate companies owning the rolling stock from those owning the infrastructure, particularly in Europe, where this is required by the European Union. This has allowed open access by any train operator to any portion of the European railway network. One of the many big changes under way in the world’s railway industry is that, the once-close partnership between the big train makers and their big customers has become more adversarial. Instead of designing and assembling rolling stock themselves, most national railways in the world in recent years have handed over the responsibilities to big manufacturers like Siemens, Alstom and Bombardier. These multinationals are becoming global designers, builders and maintainers of trains, modelled on the big automobile or aircraft makers. Besides, new technology is also forcing operators and suppliers to revise their standards and ways of working. The pace of change is picking up faster in the developing world than in the developed. In China, the big railway groups of CREC, CRCC, CSR, CNR and CRSC were separated, since years, from the MoR which is the owner of the infrastructure and the supervisor of the national railway operator, Chinese Railways. As mentioned above, all the railway manufacturers are now under the direct supervision of the State-owned Assets Supervision and Administration Commission of the State Council. The performances of these state-owned railway groups are strictly measured by the state, and competitions among them have been created as well.

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Domestic companies emerged to challenge global multinationals Eight megatrends summarized in the World Rail Market Study for UNIFE, are considered to impact the rail industry within the next 10 years, and almost all of them have close relevance to China, especially urbanization, increased mobility, energy scarcity, enviornmental concerns, increased political support and rise of RDE (rapidly developing economies). With the growth of the RDE, domestic companies have emerged to challenge global multinationals. Having started either by serving their domestic market or exporting low-cost items overseas, they are now trading up and starting to conquer the global marketplace. These challengers can leverage structural advantages in competition with established multinationals. For example, CSR and CNR have grown with their home market to significant sizes. CSR had a turnover of around €4.5 billion in 2009. Both CSR and CNR have started to compete globally, selling urban and freight rolling stock abroad, inlcuding Singapore and Australia. At the same time, Chinese construction companies under CREC and CRCC are already bidding for and delivering infrastructure projects in Asia, North Africa and Latin America. Chinese railway players are all state-owned and state-backed, which makes them financially powerful and more and more technologically competitive. They have their nation behind them with an overall country strategy. The global multinationals find no choice but to face the sophistication and determination of Chinese railway industry. They have to adjust their approach toward Chinese railway enterprises: their customers in China market meanwhile their competitors and/or their partners in the world market. On top of that, the industry universally also expects a large-scale effort by Chinese manufacturers to break into many of the world’s most important markets. Boosted by stimulus investments China is catching up fast to become a technology innovator With a better intellectual property environment and with China on track to develop its own technology, more and more foreign companies are now directing their resources to suit local needs and tastes in order to sell in China. They have realized that, not only should they develop the right products for a market that starts to serve its higher end needs by itself, but they should also offer these products at competitive prices and with the right services. To do so, they have to count on local product development. Indeed, according to a recent survey, two third of European companies have set-up local R&D centers in China or are planning to do so in the next 3 years. Under these new circumstances, to participate fully in the development of China, foreign companies need more and more to develop their products in China, in order to be able to produce at local costs. Adjusting products to the market and to the local production circumstances are the two top reasons for companies to do R&D in China. If foreign companies fail to adjust to the new realities of China, markets will be left to Chinese competitors, already existing or yet to be born. China started its latest race towards innovation about 5 years ago, slowly but steadily. Western companies are still ahead and have the opportunities to keep both a top position in world markets and to continue developing the technologies and products of tomorrow. Still, they will maintain this position only if they acquire a top position in China as well. To do so, they have to start racing at full speed now, with no hesitation and break.

7.3 Opportunities for Swiss Rail Industry New entrants are roaring out of the sidings. China has apparently entered a new era of railway development. When the major rail lines of China's high-speed rail network are completed by 2020, i.e. 25’000 km high speed lines with operational train speed of 350 km/h, passengers can reach all provincial capitals from Beijing in 8 hours by train except Urumqi of Xinjiang Autonomous Region, Lhasa of Tibet Autonomous Region and Haikou of Hainan Province. China's high speed rail network will become the largest, fastest, and most technologically advanced high speed railway system in the world.

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China is also becoming an increasingly important global player in the rail sector as its railway-related exports have been rising fast in the past years. Chinese train makers and rail builders have signed agreements to build HSRs in Turkey, Venezuela and Argentina, and they are bidding on HSR projects in the United States, Russia, Saudi Arabia, Brazil (São Paulo to Rio de Janeiro) and Myanmar, and some other countries. They are competing directly with the established European and Japanese manufacturers, and sometimes partnering with them. In Saudi Arabia's Haramain High Speed Rail Project, Alstom partnered with China Railway Construction Corp. to win the contract to build phase I of the Mecca to Medina HSR line, and Siemens has joined CSR to bid on phase II. China is also competing with Japan, Germany, South Korea, Spain, France and Italy to bid for California's high-speed rail line project, which would connect San Francisco and Los Angeles. In November 2009, the MoR signed preliminary agreements with the United State's high speed rail authority and General Electric (GE) under which China would license technology, provide financing and furnish up to 20 percent of the parts with the remaining sourced from American suppliers, and final assembly of the rolling stock will be in the United States. In July 2010, $10 billion railway deals were signed with Argentina when Argentine President Cristina Fernandez de Kirchner visited Beijing. Starting from 2011, China is going to build high speed railway to Singapore via Laos, Thailand, Malaysia. It is important to realize that, the same trends listed in the World Rail Market Study for UNIFE supporting the rise of RDE challengers, at the same time have created and will continue to create tremendous opportunities for the rail supply industry in the developed economies. China’s ambitious railway development plans over the next ten years and aggressive expansion into the world railway markets create opportunities for the railway enterprises home and abroad. Technolog transfer from developed world does not mean China has everything they need, and that there are no more difficulties and problems for the railway development in China. When China announced lately to the world that they planned to develop super-high speed train of 500 km/h, China need to further develop and upgrade its existing high speed technology and China certainly cannot do everything on its own. China is buying and will need to buy either products or transfer technologies from outstanding enterprises in the field, in order to fill in the gaps in the big systems and machines. It is common knowledge that many important components, mechanical and electrical equipment, hardware and software, that are installed in the big systems and machines provided by the big brands are normally outsourced and supplied by the SMEs. All these open opportunities and support growing demand for products of the rail supply industry in developed economies. Switzerland is well reputed for cutting-edge technologies and high quality components in the world market, especially with its niche products. Swiss companies are good at working on details in big machines and equipment. Swiss rail industry is able to play a similar role in China as it has been playing in other markets. In fact, quite a few Swiss SMEs have been proceeding successfully in China railway market. What is interesting SwissRail Industry Association, January 2011, China Railway Market Study

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to know is that, without too much marketing and sales efforts, some Swiss products have been sold for years in China railway market, which is a similar case with other industries in other markets. Opportunities are always accompanied by challenges. It is never easy to enter the China market and to compete with both international suppliers and local ones. Some foreign suppliers including Swiss companies entered China market together with the big players such as ABB, Bombadier, Alstom and Siemens, with their components installed in the systems of the big brands, which is an easy way to enter a market. It is of course also easier to further expand their business in the market from that stage because they have better connections and references. Those SMEs who are not so lucky that they cannot team up with the big players, should try to manifest as much as possible their successful projects in other markets, promoting actively their products to their potential Chinese customers. One fact that Swiss railway suppliers have realized through doing business in China is that, Swiss railway products and technologies are almost unknown in the market. In order to better promote Swiss rail industry, Swiss companies who are interested in China railway market and also able to explore the market, should join forces and be more initiative and aggressive with their marketing and sales activities in the market, instead of selling at random without clear strategies and leaving the opportunities in the market to their competitors. The projected Swiss railway business delegations to the targeted markets including China, is a good idea for building up the necessary image of Swiss rail industry in the markets, which certainly will help the SMEs in accessing the huge potential railway market in China. It is high time to promote Swiss quality products and high technologies to the railway industry in China.

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8. DISCLAIMER The information in this report were gathered and researched from sources believed to be reliable and are written in good faith. Osec and its network partners cannot be hold liable for data, which might not be complete, accurate or up-to-date; nor for data which are from internet pages/sources on which Osec or its network partners do not have any influence. The information in this report do not have a legal or juridicial character, unless specifically noted.

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