Rail & Infrastructure

Train robbery?

Japanese cry foul over Chinese high-speed trains

But how Chinese is it?

When it comes to on-time performance, Japanese trains take some beating: the average shinkansen (or bullet train) pulls into stations within six seconds of its scheduled time.

That would astonish customers travelling on Network Rail, the UK’s rail track operator, which won’t even classify a train as delayed unless it turns up more than 10 minutes later than expected.

But could the super-punctual Japanese end up being left behind as far as exports of high-speed locomotives are concerned?

That follows news that China’s Railway Ministry has filed 21 international patents for its own ‘re-engineered’ bullet train design, in preparation for a sales push into overseas markets.

Japan’s Kawasaki Heavy Industries was one of the first foreign locomotive manufacturers to tie up with Chinese partners back in 2004, when it signed deals with CSR (China South Locomotive and Rolling Stock) for production of the high-speed CRH380A model.

It also provided design blueprints. But a few years on, and the Chinese believe that the current trains have evolved sufficiently to allow for registration of their own patents.

The domestic media is talking about three areas in particular where local innovation has taken the lead: a more sophisticated bogie (the chassis surrounding the train’s wheels), a lightweight design for the train’s hull, and an aerodynamic finish to its nose that reduces noise and energy consumption.

“Our technologies may originate from foreign countries, but it doesn’t mean that what we have belongs to them,” a CSR spokesman instructed the China Daily late last month. “We have added knowledge gained from experiments and made designs to satisfy our needs, so the new train is not theirs anymore.”

The Japanese still need some convincing, including Yoshiomi Yamada, president of Central Japan Railway. He was quoted in The Nikkei newspaper last week saying that the new patents touch on the product of “many years of sweat and tears shed by engineers at Japanese manufacturers”. Yomiuri Shimbun – another Japanese newspaper – was also annoyed. “Technology provided as a token of friendship is now leaving a sour taste in the mouth,” it complained.

WiC is no expert in bullet train technology. But media estimates that Chinese re-engineering efforts have been completed for an R&D bill of $15 million suggest something of a steal in cost terms, at least.

How the other foreign manufacturers involved in China’s high-speed rail respond to the patent filings is also going to be intriguing.

WiC reported in issue 82 on the rivalry between the two dominant local companies: CSR and CNR (predictably enough, China North Locomotive and Rolling Stock). Both have also tied up with different foreign partners: CSR with Bombardier of Canada, as well as Kawasaki; CNR with Siemens of Germany and Alstom of France. And the Nikkei newspaper warns that firms like Siemens are in a better position than Kawasaki because they have managed to disguise their irritation over Chinese technology claims.

The message? Keep your eyes on the bigger prize of a planned doubling of China’s high-speed network (cost: Rmb700 billion). Those lucrative equipment orders compensate for any chagrin over IP.

And bid jointly for overseas projects – a tactic Siemens seems to be employing with CNR and their jointly-developed CRH380B locomotive. CSR is also partnering with General Electric to sell locomotives in the US (including the CRH380A). The deal involves GE as a guide to the legal landscape, although there is also talk that CSR may transfer its technology rights to the American firm as part of the sales effort.

Rather than complain, says Nikkei, the Japanese “might be wise to take a page from the German playbook” i.e. accept the fait accompli and make the best of it. Symbolically it was the Sino-German CRH380B train that made the inaugural trip on the Beijing-Shanghai route last Thursday.

What’s the alternative? One option is a round of legal challenges in foreign courts – to stop the Chinese trains being sold abroad. But that’s also likely to marr the litigants’ business in China.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.