Sunday, November 21, 2021

As Railroads Grow In importance China Plans To Dominate

Chinese-Bullet-Trains On Full Display

One vision of the future has people across the world zipping from place to place on high-speed trains. Of course, trains are not yet that big of a factor in America but they may become a bigger player in moving people as the sky grows crowded. If this is to unfold the market will most likely be controlled by a few well-entrenched big players. Many industry watchers see the writing is already on the wall, "Get Big Or Die" but that may be a simplification of what we are seeing. 

According to the South Morning China Post in an article published about four years ago, China Railway Rolling Stock Corp (CRRC), the merged new entity of China’s two largest train makers, was on the move. It had just announced contracts worth 12.2 billion yuan (HK$15 billion), alongside another 4.84 billion yuan deal to supply metro trains to Hong Kong. Among the eight deals announced at the time, only one was for export. Still, this company should not be underestimated, at that time, CRRC had 90 percent of China's domestic market for the production of railway locomotives, bullet trains, passenger trains, and metro vehicles.

CRRC has won rail contracts as far afield as Chicago and Kenya. China’s Belt and Road initiative will also bring yet more international business its way. Be warned that CRRC's size plus access to cheap finance will let it crush rivals unless action is taken. Americans would be wise to pay a little more attention to such mergers and China's predatory form of capitalism. Do not expect Biden or our current Transportation Secretary, Pete Buttigieg to bring this to our attention as they dole out more than a trillion dollars from America's recently passed infrastructure package.


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 (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

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