China’s CSR on the Global Market Fast Track

IN mid-December， the last round of procurements of tramcars and subway trains in China’s mainland for 2013 was completed alongside the release of the bid result for trains for the northern extension of Shanghai Metro’s Line 11. China South Locomotive & Rolling Stock Corporation Limited （CSR）， the larg- est rail transit equipment manufacturer in China， obtained an order of 2，160 trains in the total 20 procurement projects， accounting for a market share of 54.2 percent. Meanwhile in 2013， CSR hastened its pace of exports to foreign countries and international cooperation， making made-in-China rolling stock available in Asia， the Middle East， Africa and Latin America on a large scale.

In August 2012， CSR won the bid to provide advanced subway trains for the Ankara subway project. Four lines have been planned for Turkey’s capital city， M1， M2， M3 and M4. The M1 line has been in operation since 1997， while construction of the other three lines is planned to be completed this year. On completion the subway mileage in Ankara will reach 60 kilometers. In order to meet the needs of the highspeed development of Ankara’s subway， and according to the contract， Zhuzhou Electric Locomotive Co.， Ltd.， which is affiliated with CSR， will manufacture and provide 324 train carriages for Ankara’s subway. By the end of 2013， 42 train carriages had already been delivered， well ahead of the deadline stipulated in the contract. The Ankara subway project is not only the biggest order that a Chinese rail transit equipment manufacturer has won in Europe， but also a precedent for future Chinese exports of subway train manufacturing technology to Europe.

Zhuzhou Electric Locomotive excels in drawing up development plans for modern urban rail transit systems and producing high-standard rail transit products. In the past decade， Zhuzhou Electric Locomotive has successfully concluded 28 large orders， manufacturing around 4，000 rail transit vehicles of different types for big cities at home and abroad.

China Today was granted an exclusive interview with Xu Zongxiang， vice president of CSR， who expounded on the corporation’s way into the overseas market.

China Today： We know that 2013 produced a bumper harvest for CSR in terms of overseas business. Your corporation achieved dazzling export orders worth US $2.2 billion. What are CSR’s advantages in international competition？

Xu Zongxiang： We have three main advantages： First， we have the world’s strongest production capability in the industry. Second， we enjoy a cost advantage. Third， we have rich experience in product operation.

China Today： Can you elaborate on“the world’s strongest production capability” that you mentioned？

Xu Zongxiang： To be specific， our strong production capability is embodied in our guarantee of timely delivery of goods， our high research and development （R&D） ability and our effective organization. In production， R&D is usually the longest process. Owing to our mature and high-caliber R&D team， we’re endowed with powerful manufacturing capacity and are able to deliver goods on time， even ahead of deadline. Take the Zhuzhou Electric Locomotive Co.， Ltd. affiliated with CSR as an example. Its yearly production capacity hits 1，200 electric locomotives. Moreover， CSR’s production capacity also benefits from China’s maturing economy and its rapid development. For example， many of our parts and accessories are purchased from other manufacturers in China， who have to be qualified to provide the parts on time and with guaranteed quality. Thanks to China’s comprehensive network of suppliers， we enjoy a complete industrial chain.

China Today： Does the “advantage in costs” you mentioned refer to the low labor costs in China？

Xu Zongxiang： Not exactly. We enjoy an advantage in costs mainly because of the low costs throughout the whole industrial chain. By using domestic suppliers， we spend less on parts and accessories； therefore， we enjoy overall low costs and have a competitive edge. Given the current development of China’s economy and society， it is impossible for labor costs to remain cheap. As you have witnessed at Zhuzhou Electric Locomotive， the modernized production facilities and various employee benefits are proof that labor costs are no longer low.

In addition， we have an advantage in terms of product operation. Take highspeed rail as an example. China has the largest high-speed rail network in the world with the total mileage exceeding 10，000 kilometers， accounting for about 50 percent of the world total. China is vast； the railway spans from frigid to tropical areas and from the humid coastal area to the dry Gobi desert. Our products have stood the test of complex environments， accumulating much experience for our R&D teams.

China Today： High-speed rail “fever” has hit both China and other countries. How will CSR ride the trend？

Xu Zongxiang： Indeed， high-speed rail has become a hot topic. It covers a wide range of technologies， related to the lines， roadbeds and tracks， trains， signals and power supply. For the past three years， over 200 trains produced annually by CSR have been put into operation in China. Because of the different rail conditions and requirements on speed and other aspects， the trains need to be custom-designed. It is well known that China’s first high-speed train， which could reach 200 kilometers per hour， was produced by CSR. As mentioned， we enjoy first-rate capability in R&D and manufacturing. The fast development of high-speed rail in China benefits us. The wide use of our products has prompted us to constantly improve our technology.

China Today： To date， with which countries has CSR collaborated on projects or investments？ What is CSR’s overseas development strategy for the future？

Xu Zongxiang： Finished locomotives and parts produced by CSR have been exported to 83 countries and regions all over the world. For example， we export electric locomotives and diesel locomotives to South Africa， Australia， Uzbekistan， Turkmenistan， Vietnam， Argentina and some Middle Eastern countries； we export subway trains to Turkey， India， Singapore and Malaysia； and we export diesel multiple units and electric multiple units to Malaysia， Sri Lanka， Venezuela， Namibia， Tunisia and Georgia.

Over the years， CSR has transformed from simply selling products to providing a one-stop solution combining products， technology and service. Currently， in countries with the brightest economic prospects， we actively implement localization projects and participate in the local economic construction. We have built or plan to build production and service bases in Malaysia， Turkey， Kazakhstan， South Africa and Argentina. Take our project in Ankara as an example. We built a base there， hiring local employees and transferring our technology. As CSR earns a better global reputation， the countries that receive our exports put forward higher requirements in terms of localization and technology transfer. As an international enterprise， we shoulder the responsibility of contributing to the development of local employment， technology and economy through cooperation.