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Chinese high-speed rail enters the US market

(People's Daily Online)  ??  2014-10-29 16:29

After confirmation from the Massachusetts Bay Transportation Authority (MBTA) that Boston will import 284 subway trains from CNR (China North Railway) Changchun Railway Vehicles Co Ltd, the stock prices of CNR and CSR (China South Railway) both rose against most other stocks on the market. CSR announced only a few days ago that the government of California had accepted its Letter of Intent for a high-speed rail project in California.
 
Entering the US market is a new step for Chinese high-speed rail. With the promise of a radiation effect from the US market, worldwide prospects for Chinese high-speed rail are very bright. According to statistics from the Germany company SCI Verkehr, the US has the second largest railway market right behind China, and has a high demand for railway vehicles. About ten US cities, including New York, Philadelphia, Los Angeles, and Chicago, currently have plans to renew their railway vehicles. A market like this will trigger fierce competition among the countries that produce railway vehicles, hence Chinese companies will certainly come under real competitive pressure.
 
Chinese corporations like CNR and CSR have become leaders in the high-speed rail industry in the past few years. Starting to expand oversea markets from 2004, Chinese railway corporations have developed over the last 10 years from exporting components to exporting entire train vehicles, from low-end products to high-end products, and from less-developed to developed markets.
 
Based on the statistics from SCI Verkehr, CNR has been the world leader in railway equipment for the last three years. It is also the biggest supplier of railway trains in the world, taking 22.4 percent of the global market over the past 5 years. Chinese corporations are well-known for their strength in cost control. Their advantages in low labor cost and efficient industrial chain have helped China to become the country with the world's most comprehensive industrial chain for high-speed railway trains.
 
Though the whole industrial situation is auspicious, CNR and CSR should not be blindly optimistic. The price advantage of Chinese corporations does strengthen their competitive position, but at the same time these companies' profit margins are relatively lower compared with foreign railway corporations. There is still a lot of room for improvement for Chinese railway suppliers. 
 
This article is edited and translated from ????????????source: China Youth Daily, author: Zhou Shuo