[Viewpoint] China’s speeding bullet

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[Viewpoint] China’s speeding bullet

A newly built Chinese high-speed train called the “Harmony and Concord” approached the platform of the Shanghai Hongqiao Railway Station last Friday morning. The high-speed train running between Shanghai and Hangzhou was in the middle of test operations. It is designed to run at an average speed of 350 kilometers per hour (217 miles per hour) along the 202-kilometer rail line between the two cities.

But Sept. 28 was more noteworthy: the train attained its highest speed - 416.6 kilometers per hour - on that day, breaking the previous record of 394 kilometers for the Wuhan-Guangzhou Railway, 394 kilometers per hour, and setting a world record.

Only five years ago, China was a barren zone for high-speed train technology.

However, China now has become the world’s No.1 bullet train manufacturer. China’s development of high-speed train technology is the achievement of its strategy to develop new technologies by opening up its market to other countries’ technologies.

China has been actively obtaining advanced high-speed train technology from Siemens (Germany), Kawasaki Heavy Industries (Japan) and Alstom (France) since 2004. China has sometimes opened up 70 percent of its market to Western bullet train makers. However, these companies have reluctantly transferred their advanced technologies to Chinese partners in order to continue to seek business opportunities in China.

China, of course, has rapidly learned the high-speed train technologies of Western countries.

As the transfer of technology continues, foreign companies’ market share in China cannot help but start to shrink. There are very few countries that will easily allow foreign companies to win its business projects when domestic companies can do the job instead. Foreign firms’ market share in China’s high-speed train industry has fallen under 20 percent.

Chinese companies, which now have high-speed train technology of their own, have started to explore overseas markets. Chinese companies early this year won contracts for high-speed train projects in Singapore and Indonesia. China can now offer competitive bids for carrying out the high-speed rail projects.

Chinese companies have grown so much that they cannot be ignored in bidding competitions for bullet-train projects in Brazil and in California. They have aggressively begun making their move, with the Chinese central government’s financial support, to win the projects.

Western companies do not think that Chinese companies have fully acquired all their advanced high-speed train technologies on their own. Rather, they believe that the technologies China has acquired were somewhat falsified.

They also think that their technologies have been stolen by China. Despite this, Western companies can’t find any other options, because they cannot ignore the giant Chinese market.

Western companies wish to be involved with at least 20 percent of the Chinese market and one of their strategies is to cooperate with China on overseas projects. China is expected to be involved in more than 50 percent of the global bullet train projects over the next decade.

Western companies also think that strategically cooperating with China would be more profitable because China’s bullet train projects in developing countries in Northeast Asia and the Middle East are very competitive. For example, Germany-based Siemens has participated in a consortium with China for a high-speed train project in Saudi Arabia by giving up sole bidding.

China has been pursuing a three-stage development strategy: inducing advanced technology through its huge markets, grabbing domestic market share by chasing advanced technologies and exploring overseas markets.

Such Chinese-style industry development patterns also apply to its shipbuilding, auto and IT industries.

China was able to develop the world’s fastest train in just five years by pursuing its own development strategy.

The world’s leading high-speed train manufacturers are now playing catch-up and seeking ways to cooperate with China, even though they face difficulty in matching China’s speedy development. The newly built Shanghai-Hangzhou bullet train reminds me of what John Naisbitt, a popular American futurist, said several years ago: “If you can’t compete with China, join China’s economic development.”

*Translation by the JoongAng Daily staff.
The writer is the deputy director of the China Institute of the JoongAng Ilbo.

By Han Woo-duk
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