CRRC on the fast track for global expansion
Beijing’s efforts to guide a stronger yuan have helped boost the currency, but only increased economic growth driven by sustained efforts to press ahead with reforms will be able to sustain this trend, according to analysts.
The People’s Bank of China, the central bank, on Wednesday set the yuan mid-point at 6.7858 against the dollar, its strongest level since Nov 9.
The relative strong performance of the yuan against the dollar can be traced back to the beginning of May.
The yuan strengthened by 1.27 percent and 1.99 percent, respectively, in the offshore and onshore markets on May 10, ticking up from a likely depreciation trend.
The interest rate was only one element pushing up the yuan recently, especially in the offshore market, while the new factor added to the pricing model of the yuan by the central bank played a more significant role, Xie Yaxuan, chief economist with China Merchants Securities Co, wrote in a research note.
The central bank said on May 26 that it was considering introducing a “counter-cyclical factor” in setting the reference rate of the yuan against the dollar.
A worker guides two bullet trains to connect at a CRRC plant in Qingdao, Shandong province. CRRC hopes to take a 10 to 15 percent global market share by 2020.
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China Railway Rolling Stock Corp, the country’s railway vehicle manufacturer, plans to establish 11 regional branches throughout the world by 2020 and further target key markets including Europe, North America, Russia and Central Asian countries, said a top executive.
The 11 regional branches will be set up in countries such as Russia, the United Kingdom, South Africa and Australia. The company wants to manufacture trains, purchase parts, and build maintenance and service facilities through a localization strategy and hiring local employees in key markets in 2020.
CRRC set up its first regional branch for North America in Massachusetts last year. The branch is designed to coordinate its businesses and participate in project bidding in the United States, Canada and Mexico.
CRRC President Xi Guohua said the group plans to conclude one or two overseas acquisition deals this year and accelerate exports of both its products and technical standards for 160-kilome- ter-per-hour electric trains, cargo EMU trains, new energy trains and piggyback wagons.
CRRC is currently in talks with the Czech Republic’s Skoda Transportation AS for a 100 percent stake, a move to increase its market share in Europe’s railway markets.
The Czech company mainly produces trams, electric locomotives, carriages and electric buses, as well as traction motors and complete drives for traffic systems. If the deal is sealed, this will be the first time the Chinese group has taken over a fullset rail transit equipment manufacturer.
“Our market development strategy has already shifted from only shipping trains to overseas markets to building a global network to compete with established foreign rivals,” said Xi.
CRRC hopes to take a 10 to 15 percent global market share and is expecting to raise the total volume of its overseas orders to $15 billion in 2020.
“Even though a lot of money can be made from selling trains, providing maintenance services and selling trains directly in overseas markets can also be profitable and convenient,” said Feng Hao, a rail transporta-
tion researcher at the National Development and Reform Commission.
The competition is fierce. Foreign rivals such as Siemens AG of Germany, France’s Alstom Group and Bombardier Inc of Canada, have all built their global service and sales networks to boost their sales revenue in major overseas markets in Asia, the Middle East and Europe.
CRRC has so far pushed a number of products, including high-speed trains that can run at 350 kph, middle-to- low speed magnetically levitated shuttles, high-speed commuter trains running at a maximum speed of 140 kph, piggyback wagons, hydrogen-powered tramcars and oil-electricity hybrid locomotive, into both the global and domestic markets.
In addition to producing trains, CRRC has diversified its product categories to include semiconductors, new energy vehicles, new materials, offshore engineering products and industrial robots.
Hunan-based CRRC Zhuzhou Locomotive Co Ltd, a subsidiary of CRRC, announced last week that it has developed a smart bus to tap lucrative urban transit markets in both the domestic and global markets.
A standard bus is about 30 meters long and equipped with sensors that can read the dimensions of roads and plan its own route, and a standard bus has three carriages with a capacity of 300 people.
It costs around 400 million yuan ($58 million) to 700 million yuan to build a kilometer of metro line. Such a bus costs up to 15 million yuan.
Contact the writers through zhongnan@ chinadaily.com.cn
China unveiled two national standards on Wednesday, to guide enterprises to efficiently leverage information technology in industries, as the country steps up efforts to boost the competence of its sprawling manufacturing sector.
The two standards, released by the Ministry of Industry and Information Technology, outlined how to boost the integration of informatization and industrialization management systems.
The move aims to help enterprises lower operating costs and boost productivity. It is the latest move by China to push forward the Made in China 2025 strategy.
Xie Shaofeng, director of the ministry’s information and software service division, said: “The standards will guide companies to take sustainable competitive advantages in the internet era, gaining new capabilities, such as improved technologies and the ability to analyze the collected data.”
The new standards will pave the way for companies to use information technology, such as big data and cloud computing, to promote the development of data distribution, and then secure a foothold in the future market.
Zhang Feng, chief engineer of the MIIT, said more than 4,300 domestic companies had tested the standards in recent years. As a result, their operating costs dropped by 8.8 percent on average, and their profits increased by an average of 6.9 percent.
Fu Gang, deputy chief information officer of China Railway Rolling Stock Corp, said implementation of the standards had optimized the firm’s organizational and management system.
“Guided by the standards, we’ve sorted out and optimized our internal management system, and integrated the standards into our existing management standard systems. In the future, we will explore more new modes with the focus on smart manufacturing, technological improvement and internet plus.”
By the end of 2016, CRRC had established the assessment system and working platform for the integration of informatization and industrialization, which helped collect, analyze and assess the data online.
Wang Angeng, member of the Advisory Committee for State Informatization, said: “Companies can implement the standards, and then perfect the strategies that work best for them. This will help fix problems, such as clarifying each one’s responsibility and promoting connectivity.”
Zhou Jian, secretary-general of the China Service Alliance for Integration of Informatization and Industrialization, said the new standards will help firms boost productivity.
“Previously, those companies relied more on land, investment and labor. Instead, today technology and data play more important roles.”
In 2016, the MIIT issued a development plan for the integration of informatization and industrialization (2016-20). It was expected that 30 percent of companies would enter the stage of enhanced integration and innovation by 2020.
TRANSPORT
Ma Si contributed to this story.