China’s train ride on hold?

 
AseanAffairs     16  August 2011

During the last year and even earlier, China has been aggressively marketing its high-speed train technology throughout the world with a particular emphasis on the Asean countries next door.

For example, the new cars on Bangkok’s light elevated railway, called the Skytrain, were manufactured in China. The original cars were produced by Siemens, the large German conglomerate.

On July 23, however, China’s rail marketing plans get off track when a major train accident took 43 lives with 190 others injured. Subsequent events have further stalled the Chinese marketing effort. First, the way the Chinese government mishandled information about the accident drew widespread criticism from within China that had Internet blogs boiling over for weeks.

Following that, a statement from Japan indicated that the Japanese had warned the Chinese to proceed “slowly” with their high-speed rail program development as the task was riskier than it superficially appeared. The Chinese had apparently studied Japan’s proven high-speed technology as a blueprint for developing their industry.

The most recent ripple effect of the train disaster hit today when a US $5 billion listing plan by the operator of China's new Beijing-Shanghai bullet train, initially targeted for next year, will be further delayed following last month's deadly train crash, sources said.

The delay is the latest blow to the nation's scandal-plagued rail system after China CNR Corp Ltd announced last week it would recall 54 bullet trains used on the showcase Beijing-Shanghai line. Services would be cut by 25 percent.

State-controlled Beijing-Shanghai High-Speed Railway had hoped for an initial public offering in Hong Kong and Shanghai as early as in 2012, but any listing is now unlikely in the immediate future, IFR, a Thomson Reuters publication, said citing bankers.

As Asean countries on the Asian continent (Cambodia, Laos, Malaysia, Myanmar, Thailand, Vietnam) gear up for the start of the Asean Economic Community in 2015, an improvement in infrastructure is a priority and China was well-positioned to fill that need.

It seems certain that China will proceed with its high-speed train efforts after a period of reevaluation, however, one can bet that the first priority in their marketing efforts will or should be safety rather than speed.