China’s High-Speed Rails Disgraced by Fake Halfen

The original cast-in channels from Germany that are widely used in the high-speed railway of China were reported to fail the antiwear and anti-fire tests. In addition, the suppliers neither sent out the sample for the examination in time nor brought forth relevant examination reports.

Moreover, its role of being “originally made in Germany” now is being questioned as it might be“made in China”.

Actually, the People’s Daily reported the Halfen event early in December 2011. But the following report was nowhere to be seen. Why did Halfen, a well-established German company famous for its preciseness, resort to deception in China? Then, how can an enterprise which never sent out its products for examination or brought forth relevant examination reports nearly take the dominant place in the market?

A source explained that the Halfen in China is not the German Halfen as its headquarters in Germany knows nothing about this. In addition, Halfen China is famous for its PR capability and there supplies 70% of the cast-in channels in China.

The Ministry of Railway is reported to attach great importance to this matter and the investigation has already begun.

Century-old Halfen Might Be “Pirated”

Halfen is an old brand which is widely respected and praised in the world. This company was founded in 1929 and enjoys unprecedented fame in the global construction area. The cast-in channels it produces is the most popular among all similar products and are widely used in the high-speed railways of Germany, Japan and France.

Halfen stepped into China in 2005. In that year, China 4th Railway Survey and Design Group Co., Ltd introduced Halfen’s cast-in channels in the Wuhan-Guangzhou High-speed Railway. In the same year, Hong Kong Goldway Co., Ltd, Halfen’s agent in Asia, appointed Beijing Anke Fortune Construction Management Co., Ltd as the sales agent of Halfen’s products in mainland China. As the market keeps growing, Halfen acquired its Hong Kong agent and founded the Halfen Beijing Company in China.

According to the report from the People’s Daily, some netizens revealed that the Halfen cast-in channels imported from Germany that were applied in the high-speed rails between Shanghai and Kunming, and between Hefei and Fuzhou, were actually made in China. The samples taken from the construction site were sent for the examination and their fatigue- and fire-resistant performance could not meet the standard of the Design Institute of the Ministry of Railway.

In addition, the People’s Daily also reported that subordinate processing plants of Halfen Beijing China could be seen in Yizhuang and Sanhe – both are counties under the administration of Beijing. The operators of these plants were said to have admitted that they manufactured cast-in channels labeled as originally made in Germany. An insider familiar with the supply chain of cast-in channels said that 70% of the Halfen castin channels in China were made in China and only one quarter was imported from Germany. There is a huge disparity in quality between the original products and the ones made in China.

In November 2010, Hao Jiwei, vice general manager of Halfen Beijing Company, said that the Wuhan-Guangzhou Railway, Zhengzhou-Xi’an Railway, Guangzhou-Shenzhen Railway, Hefei-Fuzhou Railway, Beijing-Shanghai Railway and other railways – 20 in total – used the products of Halfen. Based on this, Halfen, or fake Halfen, indeed takes 70% of the Chinese market.

Then why did such a well-established enterprise risk its own fame to substitute low-quality products for high-quality ones? A source close to the Ministry of Railway said: “Halfen’s headquarters in Germany might not know about this thing. Its operating pattern is featured with sales agents responsible for taking orders while headquarters for producing and sending products. If the agent company in China produced the products by themselves, Halfen Germany might not be aware of this matter.” He said that most of the Halfen products in China are“pirated”, or, commonly called “Shanzhai” products in China.

Journalists used “Halfen cast-in channels” as the key in Baidu and find tens of thousands of links that claimed to be the agent of Halfen cast-in channels. Journalists called one of them randomly and were told that “the Halfen label is used but the products are not made in Germany”. Actually, Halfen allows no companies to produce cast-in channels in China.

An anonymous insider from the Ministry of Railway said that most of the said imported Halfen cast-in channels from Germany were actually made in China. Their price is very low and in order to lower the cost, many manufacturers in China use inferior materials and downgrade the quality standard.

“The Amazing Halfen PR Department”

The bidding documents of the basic construction materials for railways have definite stipulations: suppliers of cast-in channels and related products must have six examination reports about size, dynamic performance, fatigue resistance, corruption prevention, current-carrying performance and fire resistance before they make official bidding offers. However, Halfen China never submitted the six reports in China; instead, it used the corporate standard in the German civil construction to replace the examination reports.

The report about the quality of Halfen cast-in channels in China was first seen in December 2011 but no sequels were found. What made even the People’s Daily, one of the largest newspaper in China shut up? Why could the supplier win the bidding without offering documents as required? Why was Halfen still so popular when the Ministry of Railway was short of capital? The answers to these questions all refer to the “amazing PR department of Halfen”.

The aforementioned report from the People’s Daily quoted that all the design plans for the Changsha-Yuping line in the Shanghai-Kunming Railway made by the China 3rd Railway Survey and Design Institute contained the technological requirements about cast-in channels in accordance with the technological data provided by Halfen. Simply speaking, the cast-in channels for this project were tailor-made by Halfen before the start of project. Meanwhile, the designer required the constructor to purchase those products in advance since “there were no similar products available in China”.

The Ministry of Railway published the Implementation Rules about the Accreditation of Manufacturers of Important Overhead Lines for Railways in 2007. According to this document, relevant manufacturers need to go through the examination and accreditation by the Ministry of Railway before launching their products in the market.

When Halfen entered China in 2005, such a rule did not come out. The only standard that could be followed in construction is issued by the China Railway Design Institution. But even after the issuance of the rule, Halfen still followed the standard made by the China Railway Design Institution.

After 2010, the Ministry of Railway made several adjustments to the purchasing system of basic construction materials for railways and set up strict examination rules for the purchased materials. But every time Halfen could miraculously remained uninfluenced and win the bidding. In comparison, some domestic suppliers, who claimed to be able to produce cast-in channels with the same quality, never got the same opportunities.

What’s more admired by its peers is that Halfen could always get money from the Ministry of Railway even though its products are 30% more expensive than similar products made by domestic companies. The price never went down with the industrial depression; instead, it went up at times.

A source from the China Railway Design Institute said that Halfen’s PR department in China was famous for their “broad personnel network and generosity”. Another source said that Halfen Beijing Company dared to spend a lot of money in PR to get more and bigger clients while Chinese domestic companies could not follow suit.