Chinese firms eye UK high-speed rail project

By Wang Cong Source:Global Times Published: 2015-10-14 23:53:01

Cooperation will boost Sino-British trade ties

High-speed trains park in an inspection center outside Shanghai on Wednesday. Photo: IC

Chinese rail firms are looking to build a high-speed railway in the UK that would connect London to Birmingham and Manchester. Experts say cooperation on the project, which will likely cost 43 billion pounds ($66.06 billion), will boost the overall trade relationship between China and the UK. 

Chinese high-speed rail contractors will compete with French, German and Japanese counterparts to bid on contracts to build the UK's High Speed 2 (HS2) project, Chinese news portal reported Wednesday.

The report did not mention which specific Chinese companies have confirmed their participation in the bidding process, but the Chinese government has long been signaling interest in the HS2 project.

According to a report by UK news website on June 17, 2014, Chinese Premier Li Keqiang expressed China's interest in investing in HS2 and other British infrastructure projects at trade talks with British Prime Minister David Cameron during an official visit to the UK in June 2014.

A memorandum of understanding was signed by China's National Development and Reform Committee (NDRC) and Britain's Department of Transport during Li's visit, and a working team was subsequently formed in April this year to boost business cooperation in the rail sector. The team is tasked with fostering communication about the HS2 project and encouraging companies in both countries to participate in the project, according to a statement posted on the website of China's Ministry of Foreign Affairs.

Chinese rail firms have also been making efforts to prepare for cooperation on international high-speed rail projects such as HS2.

According to's report, Chinese train maker CSR Corp partnered with Imperial College London, University of Southampton and University of Birmingham to form a rail technology research center in May, shortly before the company merged with CNR Corp to form CRRC Corp on June 1. The research center collaboration aims to develop cooperation in the development of high-speed rail technology, the report said.

CRRC Corp could not be reached for comment regarding its potential plan to bid for the HS2 project.

Experts say that Chinese rail firms' lower costs and advanced high-speed rail technology provide them with an advantage in securing the HS2 bid. Wang Mengshu of the Chinese Academy of Engineering told the Global Times on Wednesday that a single Chinese company or a group of Chinese rail firms will most likely win the bid.

Chinese firms have proven the strength of their technology and hands-on experience in constructing and running high-speed railways, all while keeping costs much lower than their competitors, Wang said. He also pointed out that the UK is looking for this exact combination of affordability and dependability.

Zhao Jian, a professor at Beijing Jiaotong University, told the Global Times on Wednesday that he agrees that Chinese rail firms' cost performance will likely help them win the HS2 bid.

However, Zhao said that Chinese firms would do better to focus solely on the construction of the railway and avoid getting involved in the rail system's operation, noting that the low population density of the UK might prevent the project from generating significant profits.

But the HS2 project is more than a single business move. Wang believes that if a Chinese bid is successful, cooperation on the project will improve the trade relationship between China and the UK, opening doors for future Sino-British cooperation in other areas.

Boosting China-UK trade ties through cooperation on high-speed rail, nuclear energy and other projects is at the top of the agenda for President Xi Jinping's State visit to the UK later this month, said Zhang Ji, assistant to the minister of commerce, at a news conference in Beijing on Tuesday.

China's foreign ministry announced Tuesday that Xi's scheduled state visit to the UK from October 19 to 23 will start a "golden era" of China-UK relations. A long list of deals addressing fields including the energy sector, real estate, finance, and automobiles will be signed during the visit, the ministry said.

Zhao said it is unlikely that a deal on HS2 will be signed during Xi's visit since the bidding process only opened recently.

Although plans for the project had not yet received final parliamentary approval, British Chancellor George Osborne opened the bidding process for the first phrase of the HS2 project during a weeklong trip to China in late September  and urged Chinese rail firms to start making offers on contracts worth 11.8 billion pounds. 

Posted in: Economy

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