CREC to accelerate expansion in global markets
China Railway Group Ltd, or CREC, the Beijing-based rail and infrastructure construction project provider, will build a global operational network dominated by regions, priority countries and key projects during the 14th Five-Year Plan period (2021-25), the company said in a statement on Thursday.
The State-owned group is confident it can harness new growth opportunities presented by many countries’ plans to build new railroads and subways, regional shipping lines and service hubs, upgrade their urbanization and modernize their economies for scale and sustainable growth.
The statement said this move will substantially enhance the group’s foothold in markets involved in the Belt and Road Initiative, encourage subsidiaries to deepen their localization strategies and create new jobs and commercial opportunities for communities in these countries and regions. It said the company’s big-ticket projects conducted in recent years include the construction of the China-Laos railway, the Jakarta-Bandung high-speed railroad in Indonesia, and the Padma Bridge in Bangladesh, which not only played an exemplary role in those markets, but drew attention from other economies keen to stimulate their economies through infrastructure, developmental and utility projects.
Apart from planning to put the Padma Bridge, Bangladesh’s largest infrastructure project, into actual service by the end of this year, CREC announced earlier this week the China-Laos railway, a railroad stretching over 1,000 kilometers from Southwest China’s Kunming, capital of Yunnan province, to Vientiane in Laos, will launch service in December.
Construction of the rail track was completed on Tuesday in Mengla county of the Xishuangbanna Dai autonomous prefecture, which is near a land port on the China-Laos border. With a designed speed of 160 km per hour, the direct transport route is expected to slash travel time between the two cities to less than one day.
While competing with other domestic and foreign rivals in the global rail and infrastructure construction markets, the group said it will add investment in research and development of its non-construction businesses, such as steel structures, large-scale railway construction machinery and tunnel boring machines to expand its business scope.
After decades of growth, the group’s business covers almost all fields of infrastructure construction, from railways, urban rail transits, municipal facilities, housing and buildings, to water conservancies, hydropower stations, airports and harbors.
Supported by more than 290,000 employees, CREC has built a large number of projects in Asia, Africa, Europe and South America, and runs branches and operates projects in more than 90 countries and regions. The company’s net profits grew by 6.38 percent to 25.19 billion yuan ($3.91 billion) in 2020.
As opposed to monetary measures, higher investment in infrastructure is a practical way to deal with the economic slowdown and boost manufacturing. It can also help regain economic vitality, said Zhang Yongjun, a researcher at the China Center for International Economic Exchanges.
In addition to narrowing the gap between landlocked areas and coastal countries and regions, this brings more benefits to local residents, he said.
Over the long run, countries in many parts of the world will not only speed up investment in the development of traditional infrastructure categories such as railroads and regional airport construction, but also add capital to public health services, 5G networks and cutting-edge manufacturing technologies amid efforts to place their economic growth on a firmer footing during the post-COVID-19 era, Zhang added.
China’s nonfinancial outbound direct investment rose 3.7 percent on a yearly basis to $71.02 billion between January and August, the Ministry of Commerce said. Nonfinancial direct investment into countries and regions involved in the BRI soared 9.2 percent year-on-year to $12.89 billion, accounting for 18.1 percent of total nonfinancial ODI by Chinese firms.