China’s railway builders and train manufacturers, too, are celebrating their unexpected fruits following the government’s commitment to enlarge the rail infrastructure across the country. Companies in these sectors are expected to be the major beneficiaries of the 4 trillion yuan stimulus package lately announced by the government as its key policy in ensuring China’s economy continues to thrive, despite the situation of the global financial downturn.

The first fruits of this massive investment initiative might be the delivery of 100 new high-speed trains as part of a deal between the Beijing Railway Administration and China CNR Co Ltd.

Zhang Shuguang, chief of the transportation department of the Ministry of Railways, said these new trains, which have a cruising speed of 350km per hour but are capable to reach a top speed of over 400km per hour, represent an investment of 39.2 billion yuan. Zhang said they will be introduced on the Beijing-Shanghai line in 2011. According to Zhang, the ministry is already planning to invest in more China-made high-speed trains later in 2009, and will introduce them on a number of other lines across the country.

China has already earmarked 600 billion yuan for railway investment in 2009, a 100% increase versus 2008. Even this, though, is dwarfed by the 3.5 trillion yuan to be injected into the network over the next three years. This giant investment plan will see the country’s railway network expanded to 120,000km by 2020.

At the Railway Transportation Equipment Manufacturing Industrial Park in Changchun, China’s rail manufacturing hub, celebrations over the stimulus package have been particularly hearty. More colloquially known as “Rail Park”, this joint venture, between CNR and the Changchun municipal government, is now in progress to be a global leader in rail technology within the following three years.

The cooperation between CNR and Changchun is greatly mutually beneficial. With CNR now based in Changchun, the capital of the northeastern Jilin province, rail manufacturing is now being established as one of Changchun’s key industries. CNR was the obvious partner for Changchun since it looked to becoming China’s key rail manufacturing city.

CNR already has an admirable record of success stories in rail manufacturing prior to the signing of the deal. Over the last 50 years, it has pioneered China’s first magnetic suspension passenger train, delivered the first model-A aluminum alloy train for urban rail transit use, as well as the first stainless steel urban rail transit vehicles. In 2008, the company won an order for 60 subway trains for Shenzhen, 40 light rail trains for Changchun and 455 subway trains and 160 double-deck buses for export to the Middle East.

With more than 40 years of experience in providing trains for the Beijing underground network, its remarkable expertise was recognized in 2008 with an order from the MRT Corporation to provide 10 sets of rolling stock for the Hong Kong subway.

This growing market demand saw CNR’s need for rapid expansion conforms perfectly to Changchun’s ambitions in the railway sector. Their joint venture has an annual turnover of 30 billion yuan at present and is expected to reach 50 billion yuan after the government announced its investment plan.

Up till now, over 30 major companies have moved to the Rail Park, bringing a total investment of more than 1 billion yuan. Plans are already underway to expand the existing 6.5 sq km park—with a 10 sq km zone, immediately to the north of the existing facility, already earmarked for this possibility.

New production facilities are expected to come out in August 2009 to deliver on the government’s demand for increased rolling stock. The first of the new carriages and engines are expected for delivery in June 2010.

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The new one, which is planning to be finished by the end of 2012, costs 12 billion yuan ($ 1.75 billion), 5 million yuan more than Asia’s biggest Beijing South railway station.

In spite of costing more, the size of Hangzhou East railway station will still be smaller than that of Beijing South, said an official.

Although smaller than Beijing South in size, the Hangzhou East railway station will have 28 platforms, 4 platforms more than Beijing South’s.

But the size of a railway station is not judged by the number of platforms or floor space, according to Zhao Jian, a railway expert and professor with Beijing Jiaotong University.

He said that a railway station mainly handling regional railway transport cannot possibly become the largest in the country, since the number of passengers handled will be limited.

When the new station is finished, three high speed intercity railways linking Hangzhou with Shanghai, Nanjing and Ningbo, as well as the planned Shanghai- Hangzhou maglev train, will stop by the station.

60% of the total cost for the construction is from the ministry, while the rest will be covered by the Hangzhou government and Zhejiang provincial government.

The Hangzhou East railway station is one of seven new railway project that cost 100 billon yuan, said the release.

The two intercity rail projects which link Hangzhou will be completed at the same with the finishing of the Hangzhou East railway station.

The 249-km Hangzhou-Nanjing railway will cost 31.38 billion yuan, with trains running at 350 kph. The 150-km Hangzhou-Ningbo railway, which costs 21.39 billion yuan, will have trains running at 250 kph and will transport about 80 million people every year.

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The projects that setting up and operating about 1,700 km in 15 cities by 2015 while other cities getting a green light will spend at least 600 billion yuan ($88 billion), according to the report.

Liu shijin, deputy chief of the centre said last Friday that the unexampled scale of urban rail construction is essential to meet domestic demand.

Insiders said in 1999, most ongoing rail transit construction projects were approved when some of China’s mega-cities were facing problems relating to rapid urbanization, a dilative population and worsening traffic.

Because of the government demanding for high population and financial revenue, several other cities with subway plans gave up starting plan, insiders added.

As deputy director of Institute of Spatial Planning and Regional Economy under the National Development and Reform Commission Xiao Jincheng’s words, which were quoted by Beiing Times, in the current situation, with urbanization continuing to accelerate and domestic demand increasing inexorably, it is possible the government will lower minimum requirements to give more cities the go ahead.

He also emphasized the importance of minimum requirements. Because now too many cities are eager to build lines which would unbalance spending and revenue.

If all the rail plans in these cities are approved, the spending will be over 1 trillion yuan. After the starting of these plans, the cost will be higher.

According to relevant report, nowadays, building 1 km subway in Beijing spends 800 million yuan, while which only spent 100 million yuan several years ago. So cities those are rich and with more than 4 million citizens should build subways or light as fast as possible to avoid the growing cost.

The report said that by the end of 2006, nine cities including Beijing, Shanghai and Guangzhou had built 20 rail transit lines, extending 545 km in length. Up to now, there are 37 other projects under construction in the whole country which are totally 1,000 km in length and involving about 300 billion yuan of investment.

Are you interested in the business opportunities in China?

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