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China Eyes British High-Speed Rail Contract as Latest in Global Push

With its economy cooling and desire to increase diplomatic influence aboard, China is deploying a secret weapon in 30 countries: high-speed railways.
Image: CRH380 Harmony bullet trains are seen at a high-speed train maintenance base in Wuhan
A bullet trains sit on the tracks at a high-speed train maintenance base in Wuhan, China, in 2012.DARLEY SHEN / Reuters

BEIJING — With its economy cooling and a desire to increase its influence abroad, China is trying a new approach to spread its reach: high-speed railways.

From a standing start 12 years ago, the Asian giant has built 10,000 miles of high-speed track within its borders — longer than the rest of the world's network combined and enough to stretch from New York to Hawaii and back.

Now it is trying to cement itself as a global leader in the sector.

A bullet trains sit on the tracks at a high-speed train maintenance base in Wuhan, China, in 2012.DARLEY SHEN / Reuters

The effects of this push have already been felt in the United States. China's CRRC Corp, the world's largest train maker by revenue, clinched a deal last month to help build a high-speed link from Los Angeles to Las Vegas.

And this week, Chinese President Xi Jinping arrives in the United Kingdom for a four-day state visit at a time when Britain is wooing his country to bid for the multi-billion-dollar High Speed 2 project connecting London with northern cities.

China, whose economy has cooled to its slowest pace in six years, is clearly keen to capitalize on the economic benefits of building high-speed rail lines abroad. But the recent exchanges between London and Beijing show the potential soft-power value of winning these projects on the international stage.

Opening the bidding for the $18 billion of HS2 contracts in China last month, Britain's finance minister George Osborne said the two countries were entering into a "golden era of cooperation."

And during what will be the first visit by a Chinese head of state to the U.K. in ten years, Xi and his wife have been invited to stay at Buckingham Palace and will attend a banquet hosted by Queen Elizabeth II.

An artist's rendition shows a proposed high-speed train that will connect Las Vegas and California.XpressWest

"Xi is being received with lots of pomp and ceremony, the whole nine yards," according to Dr Michal Meidan, associate fellow at the London-based think tank Chatham House. "He is being given the royal welcome — that is a big deal for Xi and his government."

China has emerged from behind the shadow of its regional rival, Japan, which began running the world's first high-speed railway in 1964.

It bested Tokyo in the bidding for Indonesia’s first high-speed railway project and constructed its first foreign high-speed railway in Turkey last year.

According to the China Times, a Taiwan-based newspaper, China's railway industry is engaged in infrastructure negotiations with 30 countries, with investments in high-speed rail projects projected set to reach $470 billion.

These developments are important, particularly with regard to the Los Angeles-to-Las Vegas contract.

"America has never accepted any such large and high-tech infrastructure from a developing country before," said Gary Wong, infrastructure analysts of Guotai Junan, one of China’s largest investment companies.

A taxi drives past Chinese and British flags on the Mall, the road leading to Buckingham Palace, in London on Monday ahead of President Xi Jingping's four-day state visit.SUZANNE PLUNKETT / Reuters

A major advantage for China is that the cost of its high-speed rail projects are one-third lower than in other countries, according to a World Bank report. It has achieved a "remarkable feat" of building more track than any other country in the world combined but at a lower cost, Gerald Ollivier, a World Bank senior transport specialist said in the report.

However, Zhao Jing, a transportation professor at Beijing Jiatong University, was cautious on predicting success for China's drive in Europe.

"China may have the best cost performance but I doubt that China’s high speed railway has a bright future in Europe," he said. "China has no worry in a fair competition but I am afraid that Europe might protect its market," he added, noting that Germany’s Siemens and the French Alstom also plan to bid for HS2.

Alexander Smith contributed.