Chinese brand in high-speed train

Chinese brand on high-speed train: China rivals European companies with its high-speed trains. Will Europe be able to compete?

As is known, production in China is labor intensive due to low technology. But China is gradually increasing its technology ladder in the export of high-tech goods. China began to have a say in the world high-speed train market.

When China decided to establish the high-speed rail network ten years ago, this project was considered the country's largest domestic industrial project. Previously, German Siemens was purchasing trains from Japanese Kawasaki and French Alstom. Today, the technology produced by the rapidly developing Chinese train companies can stand up to their rivals all over the world.

CRS, the Chinese locomotive and rail system manufacturer, is Asia's largest train manufacturer. The company, which recently made an agreement with Macedonia, sold 6 high-speed trains to this country. A high-speed train line is also being established by Chinese companies in many eastern European countries such as Romania and Hungary. Beijing is also encouraging its companies to move its high-speed train infrastructure and technology to other regions such as Asia and Africa.

From buyer to constructor

China's sales are increasing thanks to high investments. The country has spent 500 million dollars on high-speed train infrastructure so far. Despite the accident and corruption allegations that took place in 2011 and killed 40 people, Beijing transfers enormous resources to over 11 kilometers of high-speed rail line. Initially, China produced trains and equipment from foreign countries, as if copying trains that could reach speeds of 350 to 400 kilometers per hour. This disappointed companies Siemens and Alstom, who hoped to profit from the boom. Accused of copying foreign technologies, China continued to transfer technology from the West in its own way.

Unfair advantage?

China's domestic high-speed train line competed with countries such as Germany and France, as well as reducing production costs. Competition was not limited to this market alone. Europe is rapidly losing its competitive edge against China, according to Nicola Casarin, an Asian expert at the European Union for Security Studies (EUISS). China is now reaching a level where it can compete its technology with Europe. Another point that analysts argue is that Chinese companies, which the government took arms to increase sales, gained a competitive advantage over foreign companies.

'Opportunity explosion'

Domestic demand is expected to continue in the developing Chinese market due to rapid population growth and urbanization. It started negotiating with Chinese organizations for its own railway line orders in countries such as Russia, India and Brazil. The Chinese train industry, which has grown its market share in European countries, is becoming an important competitor in high speed train manufacturing. Rajiv Biswas, head of the Asian economic analysis firm (IHS), says that China will increase its competitiveness by effectively using its cost advantage at low cost in developing countries.