Summary：China will continue with research and development into its new generation high- speed trains despite the industry's tarnished image due to a spate of operation faults last year.

China will continue with research and development into its new generation high-

speed trains despite the industry's tarnished image due to a spate of operation

faults last year, according to a plan for the country's rail traffic equipment

manufacturing industry.

The new generation trains will run at speeds of more than 300 km an hour,

according to the five-year plan for the industry for the 2011-2015 period, which

was released by the Ministry of Industry and Information Technology on Monday.

The plan underscores the reliability, comfort and maintainability of passenger

rail transportation equipment. It requires thorough research and development of

key technologies and systems related to rail traffic.

The fast development of high-speed trains came under question after frequent

operation failures and a fatal crash.

On July 23 last year, a high-speed train slammed into a stalled train  near the

eastern city of Wenzhou, leaving 40 people dead and 172 injured. The incident

was blamed on faulty signaling equipment.

Construction of high-speed trains and railways cooled sharply after the State

Council, or China's cabinet, ordered slower operational speeds in the wake of

the crash.

Trains with a maximum speed of 350 km per hour (kph) were ordered to run no

faster than 300 kph, while those with a maximum speed of 250 kph had to run at

no more than 200 kph.

Some analysts then predicted the accident would hamper the nation's exports of

high-speed train technologies.

But contrary to these concerns, China has continued to export a wide range of

equipment including electric multiple units, urban rail vehicles, steam

locomotives, large road maintenance equipment to many countries such as Russia,

Australia, Brazil, India, Argentina, Turkey, Iran and Malaysia.

"Compared to other high-end equipment manufacturing industries, the high-speed

rail sector has a better industry foundation. It is also the easiest in terms of

safety control," said Yuan Gangming, a researcher with Tsinghua University.

From 2006 to 2010, China enjoyed an average annual growth rate of 31.9 percent

in the sales value of rail traffic equipments. The nation is capable of

producing 2,000 high-power locomotives, 8,000 passenger rail vehicles and 60,000

freight wagons every year.

Nevertheless, like in other high-end equipment manufacturing industries, the

nation lacks independent property rights in the rail transportation equipment

sector.

For instance, about 80 percent of equipment that make integrated circuit chips

were imported, according to previous media reports.

The nation has called for more investment and innovation to boost independent

manufacturing. The plan revealed that in 2010, the nation's rail traffic

equipment producers put nearly four percent of their sales revenue into research

and development of new technologies.

The plan says that the nation's rail traffic will boom in coming five to 10

years with a large demand for various equipments. It estimates that the nation

will consume more than 1,000 electric multiple units and about 5,000 locomotives

from 2011 to 2015.

In recent years, urban rail systems have expanded fast across China as stifling

pollution and traffic congestion has become a development bottleneck of the

world's second largest economy.

By the end of 2010, 13 cities opened 49 railways with a mileage of 1,425.5

kilometers. The lines are sprawling. China now tops the world in the

construction of urban railways, with an average annual new mileage of 270

kilometers.

By 2015, the nation's urban rail system will have a total length of more than

2,700 kilometers, the plan says.

Meanwhile, overseas demand was forecast to grow as many countries are also

building new lines or upgrading old ones.

The global rail traffic equipment market will grow by 3 percent on average each

year by 2015, with an annual demand averaging more than 100 billion euros ($130

billion), the plan says, citing forecasts of the Association of the European

Rail Industry.

In the five-year plan, the ministry predicted that the industry's annual sales

value will exceed 400 billion yuan ($63 billion) every year and investment by

backbone enterprises in research and development will exceed 5 percent of their

annual sales by 2015.

By 2020, the industry's annual sales value would exceed 650 billion yuan and

investment in research and development would exceed 6 percent of annual sales,

it said.