Govt approves merger of China's top two train makers

The overseas expansion was led mainly by State-owned companies CNR Corp and CSR Corp, with their exports accounting for about 70 percent of the total value.

"Based on the World Trade Organization's rules, China will also combine this fast-growing industry with its rich financial resources to expand its capability to use foreign capital, such as supporting companies to issue bonds to raise funds overseas," Zhi said.

Assisted by the Ministry of Commerce and the Ministry of Industry and Information Technology, the State Council is reportedly drafting a plan to further support the railway equipment industry to diversify overseas sales and service channels.

Zhou Zhencheng, commercial counselor at the Department of Outward Investment and Economic Cooperation at the Ministry of Commerce, said that even though China is a latecomer to the field, its rail equipment companies have thrived thanks to cost advantages and reasonable delivery times.

Last year, a contract for a Chinese-led consortium to build a high-speed rail line in Mexico was scrapped only days after it was signed.

Zhi urged the Mexican government to ensure the legitimate rights and financial interests of Chinese companies when dealing with problems caused by the decision.

Last Friday, Mexico said it had suspended the country's first high-speed railway project indefinitely as part of actions taken to cut this year's budget.

Zhi said, "China will continue to enhance the legal effect and details of investment protection agreements signed with various countries.

"It will offer more reports on the risks and financial barriers in overseas countries to Chinese companies to help their overseas expansion."

Demand for upgraded rail systems continues to rise in Eastern Europe, South America and Africa.

Luo Renjian, a researcher at the Institute of Transportation Research under the National Development and Reform Commission, said business opportunities are also likely to increase from new trading routes.

This follows China's ongoing promotion of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, Luo said.