CHINA CNR EXPORTS TO OVERSEAS MARKET
February 12, 2015
China CNR Corporation Limited (CNR), China’s biggest train maker and the world’s largest subway train supplier, shipped its first “Olympic Metro” train to Rio de Janeiro earlier this week, right after CNR signed a contract to sell 284 subway trains with the transportation regulator in Massachusetts. CNR’s big deals in overseas markets echo China’s efforts to, as Chinese Premier Li Keqiang said, “lift sluggish exports by promoting big ticket items such as railways and nuclear power in overseas market after the country’s trade growth fell well short of its target in 2014.”
CNR has already exported its subway trains to Brazil to help ferry football fans and the general public between Rio’s central station and the Maracana Stadium during last year’s World Cup. The new trains will be operating on Line 4 to connect the Olympic Village to the Copacabana Game Center, including two transit station with an 80-ton truck running at a speed of 35 km per hour. Founded in June 2008, CNR’s products are now used in more than 40 countries and regions around the world.
CNR has more ambitious goals in the U.S. than just its US$670 million deal with Boston to update its Red and Orange subway lines. It also made a pitch to sell its high-speed trains to California. CNR is making itself a credible rival to sector leaders such as Germany’s Siemens, Canada’s Bombardier and Japan’s Kawasaki for the US$68 billion contract to supply up to 95 trains that can travel as fast as 221 miles per hour, connecting Los Angeles to San Francisco. Besides Brazil and the United States, Premier Li Keqiang, dubbed by local media as China’s high speed rail salesman, has promoted advanced technology in Thailand, Britain, Russia and India.
However, not all deals CNR made are successful. Chinese media were exited to report a $3.7 billion contract led by China Railway Construction Corp.(CRCC), to build a high-speed rail line in Mexico. Yet only two days after the announcement, the Mexican government abruptly canceled the deal due to concerns over a lack of transparency and clarity. The cancellation surprised the Chinese firms involved, with CRCC stocks plummeting by as much as 9.9 percent, its lowest in more than six weeks in Shanghai trading, and CSR Corp falling as much as 7.4 percent.
To reduce domestic competition and enlarge overseas market share, Beijing is pushing for merger of CSR and CNR, China’s leading rolling stock makers, making their foreign peers like Alstom and Siemens feel nervous. With roughly 90 percent of domestic market share, the merged CSR and CNR would develop their overseas empire by winning the California contract and then march onto a proposed high-speed railway linking cities in northern England with British Prime Minister David Cameron’s warm welcome.
For more information on this topic, consult the following sources:
South China Morning Post – “CNR, CSR merger likely to rattle global competition”
The State Council, PRC – “China taps new driving force for exports”
China Daily – “China-made subway train arrives in Rio for Olympics”
Bloomberg Business – “China Rail Stocks Sink After Mexico Shelves High-Speed Rail Line”
The Wall Street Journal – ” Mexico Pulls High-Speed Train Contract From China-Led Group”
人民网 – “中国北车竞标加州高铁 美国官方表示看好”
新华网 – “中国北车中标美波士顿地铁项目：将出口284辆”
新浪财经 – “高铁出口首战告捷： 270亿报价拿下墨西哥高铁”
Compiled and edited by Stella Ran Zheng