Chinese wheels set to run on UK rails

Jameson said that UK companies wishing to compete for the same services in the procurement process, like the production of equipment, will not be able to compete with Chinese firms on price.

"Chinese suppliers who have a tested high-speed rail model of over 11,265 kilometers will be extremely competitive on price." Jameson said the win-win partnership is created when Chinese suppliers can help transfer experience and skills into the UK market, help accelerate growth in terms of the industry and also provide better technology.

There can be a win-win situation for UK suppliers, Chinese suppliers and the public. Roy Freeland, president of Perpetuum Ltd, a supplier of wireless train and track monitoring systems, said the expansion of Chinese firms into the UK railway industry may create potential partnerships that can help UK firms in the high-speed train supply chain to expand in the UK, China and globally.

"As CSR expands into the UK, it will need to build a supply chain locally. It may not be the whole of their supply chain, but will certainly be a part of it, so it provides a lot of opportunities for our supply chain firms, especially small and medium-sized businesses," said Freeland, who is also a member of the Rail Supply Group Council.

Freeland said that his Perpetuum colleagues have already visited CSR's headquarters in China to learn how they can fit into the CSR supply chain, and they have hosted a CSR manager's visit to Perpetuum to learn about its strengths.

He said if CSR works well with UK firms on a UK project, they could cooperate more on other projects in international markets, so the potential benefit for UK railway supply chain firms is much more than just what is available in the UK.

"Cooperation with CSR can also open up access to the Chinese market for these UK firms," Freeland said.

Chinese high-speed train firms have also used local research and development resources to assist their expansion into the UK market, as demonstrated by an R&D partnership CSR established in mid-May with three UK universities: the University of Birmingham, Imperial College London and the University of Southampton.

Clive Roberts, director of the Birmingham Center for Railway Research and Education and a professor at the University of Birmingham, said his team is also working with CSR to understand European high-speed train requirements and regulations and how Chinese high-speed train technology can fulfill these requirements.

Roberts said one key difference is that Chinese systems are more uniform because almost all the new development is on building new high-speed trains. In comparison, systems in Europe are more complex, because a lot of the high-speed trains are already built, and the focus is now on maintaining or upgrading them. To understand these differences would equip CSR with the skills to both build new railway projects in Europe, and maintain and upgrade existing ones, he said.

Apart from the UK, other mature economies in Europe are also watching the internationalization progress that Chinese high-speed rail firms are making. Deutsche Bahn AG, one of the world's largest railway operators, said last week that it is setting up a procurement office in China later this year.

The Germany-based company's move, with an eye on making CSR and CNR its potential suppliers, has been seen as a strong endorsement of China's high-speed rail development.

Paul Leslie, secretary-general with the France-based Association Trans Europe TGV, said it is important for Chinese high-speed train makers to demonstrate their capability in the overseas market.