Updated Nov. 7: Mexico unexpectedly pulled out of its high-speed rail deal with China, citing “doubts and concerns that have emerged in public opinion.”
Beijing moved one step closer to its aim of becoming a global exporter of high speed rail technology this week when a Chinese-led consortium won a multi-billion dollar contract to build a high-speed train link in Mexico.
Once a massive importer of rail technology, China now aims to be a world leader in high speed rail—from a proposed bullet train that reaches the United States via the Bering Strait to establishing a trans-Asia railway connecting Laos, Cambodia, Thailand, Malaysia, and Singapore. China is or is in talks to build or sell high speed rail trains in at least 20 countries beyond its own borders, and that doesn’t include China CNR Corporation’s forthcoming pitch to sell its trains to the US state of California.
Compared to longstanding high speed rail exporters Japan and Germany, Chinese rail is cheaper—an average of between $17-21 million per km in infrastructure costs, compared to $25-39 million per km, according to estimates by the World Bank (pdf, p.7). (Of course, much of China’s high-speed rail know comes from Japanese and German companies that trained Chinese engineers.) The upcoming merger of China’s two largest train makers, China Northern Locomotive & Rolling Stock Industry Group Corp and CSR Group, could make the country’s cost advantage even more substantial.
The country’s expertise has largely been developed in the last decade, as China built the world’s largest network of high speed rail of over 12,000 km (about 7,456 miles); it has plans to more than double that by 2020. Moreover, Chinese companies’ threshold for building in risky areas and willingness to finance their projects is higher—85% of the Mexico rail project will be financed by the Export-Import Bank of China.
But China’s ambitions aren’t without its problems. At least two of these projects, in Myanmar and Iran, have been delayed. And 2011 crash of a high speed train in Wenzhou, which left 40 dead, blamed on “inadequate testing” of signaling equipment still mars the reputation of Chinese high speed rail on the global stage.