China's subway networks are set to enter a period of rapid expansion, with around 2 trillion yuan ($319.8 billion) being poured into constructing or expanding subways in 34 cities in the next half decade.

Liu Heming, a director from the urban construction department within the Ministry of Housing and Urban- Rural Development was quoted in the Oriental Morning Post as saying that this would be the fastest pace of urban rail development that China has ever seen, while Wang Mengshu, a vice general engineer with the China Railway Tunnel Group Co, told the Global Times that these projects would be finished in roughly three to five years, but overseas they tended to take seven to 10 years.

However, not everyone is convinced that this kind of speed is a good thing. The country has been wracked with accidents involving collapsed land caused by subway construction, even in top tier cities like Beijing, Shanghai and Guangzhou. The fact that authorities are pushing to have the projects completed quickly is making the problem even worse.

In Harbin, Heilongjiang Province, about 20 land collapse accidents happened this summer, partly because of subway construction, sources inside subway construction companies told news magazine Caijing.

China Eastern Airlines has added four more cities to a service that allows its customers to book free train tickets at the same time as their flights to or from Shanghai, the Oriental Morning Post reported Wednesday.

The addition expands a program that aims to make trip planning more convenient for people traveling to and from smaller cities in the Yangtze River Delta, many of which suffer from a dearth of connecting flights from Shanghai.

"It is definitely convenient for travelers, especially those who live in second- and third-tier cities," said Xu Ruihua, a professor from the School of Transportation Engineering at Tongji University.

The four new cities that China Eastern added to the service Tuesday are Kunshan and Zhenjiang in Jiangsu Province and Jiaxing and Tongxiang in Zhejiang Province. Each city had a stop on a high-speed rail line, but none has an airport.

Under the service, which began in May, China Eastern customers can reserve high-speed train tickets to and from 11 cities near Shanghai when they book a flight, according to an airline press release. However, the service is limited to passengers flying in or out of Shanghai. "Our goal is to help make domestic or international travel more convenient for our customers in the Yangtze River Delta," said Zhang Chi, the manager in charge of the service.

Travelers who book their tickets separately can lose time and money if a flight is delayed, Zhang said. With this service, airline staff can help customers re-book tickets in advance in case of delays.

To promote the service, the airline is providing the train tickets to customers at no additional cost for the rest of the year, Zhang said. The airline will begin charging customers at some point after that, but price will always be lower than

Train travelers will have to take along their identification cards when heading toward Beijing, Xinjiang or Tibet, the Hangzhou-based Qianjiang Evening News reported.

Starting Oct 23, passengers taking trains to the capital city, Xinjiang Uygur autonomous region and Tibet autonomous region will all go through identification checks before boarding, according to the Shanghai Railway Bureau.

Chinese railway introduced a real-name system to stem the rampant ticket scalping that has plagued the Spring Festival travel rush for years, requiring all train ticket buyers to register their names and implementing a spot check of ID cards before boarding the train.
 

Those traveling by train used to have to spend almost an entire day or night in crammed compartments to get from Beijing to Shanghai, a distance equivalent to traveling from New York to Atlanta.

The then-grumbling travelers may never have imagined that a decade later an express railway would shorten the journey to less than five hours, even forcing airlines to cut flights between the two cities due to passenger losses after it was put into operation on June 20, 2011.

The 1,318-km Beijing-Shanghai High-Speed Railway, linking the nation's capital and its financial center, carries tens of thousands of passengers every day with high-speed trains travelling at some 300 km an hour.

The express trains offer a glimpse into the development of China's high-end equipment manufacturing industries that have boomed in the past decade, led by high-speed railways, a satellite navigation system and a massive aircraft project, according to China Economic Weekly.

China currently has more than 6,800 km of high-speed railway lines operating at speeds of over 200 km per hour. The total length is expected to reach about 18,000 km by 2015, according to the Ministry of Railways (MOR), the report said.

After the first railway of this kind in northern China was put into operation in 2002, the country has twice raised its railway speed nationwide, in 2004 and 2007, respectively.

The high-speed railways have provided enormous impetus to the economy, the MOR said, citing the 2 million job opportunities created in regions along the Beijing-Shanghai express railway lines.

Experts estimate that the Beijing-Shanghai High-Speed Railway has boosted domestic demand up by nearly 1.2 trillion yuan (about $191.9 million) in the first two years of the construction period.

Analysts said that large-scale high-speed railway construction will be the engine for rapid growth in China's economy amid the global financial crisis and economic recession.

Apart from the rapid development of high-speed railways, the past decade has also seen the country's ambitions in high-end manufacturing reach into the aerospace sector.

Not long after the railway projects began to burgeon in 2002, in May 2003, China sent out its third geostationary satellite into space via its own carrier rocket, the Long March-3A, for the country's indigenous global satellite navigation system and positioning network, the BeiDou Navigation Satellite System.

The government embarked on developing the BeiDou system in 2000, aiming to break the dependence on the US Global Positioning System.

Between April 2009 and December 2011, a total of nine BeiDou orbiters were successfully launched into space.

Around the same time, a preliminary model of China's first home-grown large passenger aircraft, the C919, was unveiled at Airshow China 2010, three years after getting the green light from the central government upon the initiation of the country's civil aircraft project.

The manufacturer, the Commercial Aircraft Corporation of China Ltd, said that the company has now secured 13 customers and orders of 330 C919 units, and it expects the numbers to grow during the upcoming Airshow China, scheduled for November 2012.

Wu Guanghui, COMAC's chief designer for the C919 project, said that the future global and domestic markets will have a strong appetite for civil aircraft such as the C919. " China will hand over more than 3,000 civil aircraft by 2029", a COMAC report forecast.

Likewise, the BeiDou system also aims high, setting goals of providing satellite navigation, time and short message services for Asia-Pacific regions by 2012 and global services by 2020.

Since it started to provide services on a trial basis on December 27, 2011, the network has been used in transportation, weather forecasting, marine fisheries, forestry, telecommunications, hydrological monitoring and mapping, according to the China Satellite Navigation Office.

The latest launch came in September, when the country put the 14th and 15th BeiDou satellites into orbit. By 2020, the system will consist of 35 satellites.

According to a document issued by the State Council, China's Cabinet, the development of high-end equipment manufacturing at the current stage will focus on aviation equipment, satellites, rail systems, oceaneering equipment and intelligent manufacturing. As the last two markets remain untapped, the clock is ticking.

Specifically, the sales revenue of oceaneering equipment, including equipment for offshore oil and gas extraction, is expected to reach 200 billion yuan by 2015, according to a government development plan released earlier this year.

The aggregated revenue of China's high-end equipment manufacturing industry totaled 1.6 trillion yuan in 2010, and the country expects the sector to become one of the pillar industries of the national economy by 2020.

China's National Development and Reform Commission (NDRC), the country's top economic planner, has called for increasing efforts to reach this year's railway investment target.

Xu Xianping, vice minister of the NDRC, said at a recent work conference that efforts should be made to complete this year's railway investment plan so as to meet the country's railway constrauction target set for the 2011-2015 period.

After years of torrid growth, investment in China's railways cooled remarkably in the wake of a train crash in July last year that left 40 people dead and 172 injured.

China set itself a target of investing 500 billion yuan ($79.4 billion) in railways this year. However, in the first three quarters, fixed-asset investments on railways only amounted to 344.16 billion yuan, which means it has to catch up with the rest 31 percent in the fourth quarter.

China aims to basically complete the construction of a high-speed railway network with a total operating length of more than 40,000 km by the end of 2015.

Rail equipment manufacturer China CNR Corp Ltd will bring modern trams to China for the first time, the company announced on Wednesday.

Dalian Locomotive and Rolling Stock Co Ltd, a subsidiary of China CNR, signed a contract with the Italian railway engineering company Ansaldo Breda SPA to jointly introduce modern trams and their ground power supply system to China.

Unlike traditional trams, modern trams need no electric wire netting.

Work on the project has already begun in Zhuhai, Guangdong province, and the first tram will be put into service in October 2013.

A total of 54 modern tramways are planned in various Chinese cities, and 1,200 trains are needed, according to the China CNR.

Urban rail transit, a growing trend in the nation's push to build transportation infrastructure, is a highly competitive field among China's rail equipment manufacturers.

CSR Corp Ltd, China CNR's main rival, is also developing its urban rail transit business, but unlike CNR, which focuses on big cities, CSR seeks expansion through contracts with second- and third-tier cities.

The mass transit railway system in the Hong Kong Special Administrative Region is possibly unique, in that it's profitable. While those in other countries are largely subsidized by government funds, Hong Kong's MTR Corporation runs a significant surplus that is driven not by passengers or advertising, but instead by the fact that since it was established in the 1970s, the MTRC has also been a real estate developer.

The main characteristic of this model is the financing of a substantial portion of the capital costs with the proceeds from the sale of residential or commercial properties developed on top of the stations. The MTRC, which is now a publicly traded company controlled by the government, usually awards the development rights to property companies in private tenders.

In some developments, the MTRC retains the ownership and management of the properties, which provides it with a steady and significant source of income. Rental revenues and management fees from commercial properties owned by the MTRC amounted to HK$1.73 billion ($223 million) for the first six months of 2012, about 10 percent of the total in the SAR. Profit derived from property developments for the first six months of 2012 amounted to HK$524 million, although this was down more than 50 percent from a year earlier.

Of course, the MTR model makes the biggest impact at the early stage of development when the need for capital is most pressing. The initial phase of the construction of the first two lines in the late 1970s was financed mainly by seed capital provided by the government plus syndicated bank loans and bond issues.

At that time, Hong Kong was able to leverage its advantage of being an international financial center to raise funding, mostly in US dollar, from the many global banks that flocked to the city to do regional business. Hong Kong's tax system was particularly conducive to, among other things, the loan syndication business.

MTRC was able to take advantage of the growing competition among domestic and foreign banks to continually refinance its outstanding loans to gain the most favorable terms. But still, a debt burden of that size would present too big a drag on the corporation's finance, hampering it from expanding the railway network to meet the public's growing demand.

Sourcing revenue from property developments on top of the major stations has enabled the MTRC to pay down much of its long-term US dollar debt, clearing the way for it to become profitable enough to raise funds at competitive terms in the capital markets.

The first study for a mass transit railway system in Hong Kong was produced in 1967 and the first two lines were constructed in the late 1970s against the backdrop of an economic take-off. The resulting increase in average household income triggered a surge in demand for small-sized and mid-priced apartments and retail spending that fitted well into the MTRC's development model.

That opportunity was seized upon, not only by the MTRC, but also its master, the government, to boost its revenue from sales of public-owned land for private development. Since then, the government has come to count on land sale incomes for a large part of its total revenue.

Such reliance has raised the question of whether the government is bound in its own interests to pursue a high land price policy in collaboration with the property oligarchy and, to some extent, the MTRC. Public opinion is turning more and more against the MTRC, which holds the monopoly on all rail transport in Hong Kong, for consistently raising fares while posting record profits year after year.

In this respect, the Hong Kong model has its social issues. It works best under a certain set of preconditions, some of which may occasionally be seen to be in conflict with the public interest. But by maintaining a high standard of service and ensuring a high degree of transparency in its business as prescribed by law the MTRC still retains the confidence and support of the majority of Hong Kong people. That's the true essence of the Hong Kong model.

The 132-km new railway links Hefei and Bengbu, two cities in the inland Anhui province, cutting the journey between them by at least one hour to 38 minutes on train traveling at a maximum speed of 350 km per hour.

The section also connects with the high-speed railway between Beijing and Shanghai, and is part of the special passenger lines that link Shanghai, Wuhan and Chengdu, and connect Beijing and coastal Fuzhou.

The integration greatly shortens trips from the Anhui cities of Hefei, Bengbu and Huainan to the Yangtze Delta in the east, Pearl River Delta in the south and Bohai Sea Rim in the north, all national economic engines.

The shortest trip from Hefei to Beijing has been cut to less than four hours after the new railway entered service. Previously, traveling by train from the capital city of Anhui to Beijing took about 10 hours or more.

Anhui was incorporated into the country's plan of boosting inland central provinces' development in 2006 as China seeks balanced regional development after witnessing rapid growth in the east.

China currently has more than 6,800 km of high-speed railway lines that run at a speed above 200 km per hour. The total length is expected to reach about 18,000 km by 2015, according to the Ministry of Railways.
 

China's high-speed rail network contributes to growth sustainability by narrowing economic disparities, and this creates opportunities for companies to capitalise on.

High speed rail aside, an additional $156 billion worth of accelerated infrastructure spending was announced by the China government last month.

On Premium China Funds Management's recent tour of China, Australian delegates visited the Hang Seng listed, integrated IT services provider Digital China.

Much of Digital China's offerings cater to the rapid growth of Chinese cities. For the 50-plus advisers on the trip, one of the more interesting projects was a citizen ID card program that amalgamates social security and financial information.

Another product that also complements urbanisation, and the increasing interconnectivity provided by infrastructure, is a food tracking system for supermarkets.

This allows customers, for example, to scan a meat product to instantly see its source, right down to the individual animal.

Banking technology is also in high demand, with Digital China deriving a lot of business from smaller banks in tier two and three cities that need to advance their offerings.

"While there are concerns about corporate governance, the technological and social infrastructure is very different than in Australia, and it's surprising to see just how advanced it is," said Michael Kakaras, financial adviser at Australian National Adviser.

Another adviser on the trip, Michael Holmes of Financial Momentum, said he was really impressed with the shear scale of the projects in the works at Digital China, especially the citizen ID card.

China's ministry of Railways on Thursday auctioned 25 billion yuan($4bn) of seven-year and 20-year bonds at yields of 4.57 percent and 5.16 percent, traders said.
The ministry sold 10bn yuan of 7-year bonds and 15bn yuan of 20-years bonds.
The bonds are part of the ministry's quota to issue 150 bn yuan in corporate bonds this year to fund the expansion of China's railway network. It has so far sold 130bn yuan of bonds. 

Work has started on Shenzhen's metro line 7, after a ceremony attended by Wang Rong, Party secretary of the Shenzhen Municipal Committee.
The new line extends 30.2 kilometers from west to east, starting at Lishui Station in Nanshan district, and ending at Tai'an Station in Luohu district.

There will be 28 stations in total connecting the areas of Xili, Longzhu, Futian South, Huaqiang North, Sungang, Tianbei and Buxin, covering the southern half of some of Shenzhen's main residential and business areas. The whole line will be built underground.

The project, costing 20 billion yuan ($3.2 billion), will be undertaken by Shenzhen Metro Group Co Ltd, and Sinohydro Group Ltd. Construction is expected to take 53 months, and the line will be open by the end of 2016.

Shenzhen currently has five subway lines and carries around 2.07 million passengers daily. The city, in Guangdong province, is one of four first-tier cities in the mainland. Located next to Hong Kong, it covers an area of 1,991.64 square kilometers.

During the ninth National University Games of China, which closed on Sept 18 in Tianjin, METRO Cash & Carry, an international leader in self-service wholesale, was chosen as the official food supplier.

"This marks a strong recognition of our efforts in food safety," said Uwe Hoelzer, president of METRO China.

The team from the METRO Tianjin Store was fully committed to supplying food products for the University Games. It supplied high-quality provisions, including meat, seafood, vegetables and dried food to more than 6,300 athletes, coaches and referees.

Throughout the Games, meals for all athletes and coaches were arranged according to unified recipes, standards and sourcing.

Strict standards were applied in food sourcing, detection of residual pesticides on vegetables, food processing, and inspection of the food preparation facilities.

Since the Games were held during the transition from summer to fall, abundant amounts of protein were included in the recipes, including meat, fish and shrimp, which required higher standards for a fresh food supply.

METRO has always been the industry's paragon for food safety management.

Three systems

Its traceability system, unbroken cold chain storage as well as its hazard analysis and critical control points, or HACCP, system were used to strictly control food quality from the aspects of supplier management, logistics and food safety assurance.

These systems have set a reliable control gateway for food safety along the entire supply chain - from field to market to table - ensuring food safety for the Games.

In order to provide safe and high-quality products to its professional customers, METRO introduced the Star Farm Traceability System in 2007, allowing the company to cooperate directly with local farmers to employ strict quality and safety standards for agricultural and sideline products.

The company has more than 2,200 agricultural and sideline products available for direct purchase, including vegetables, fruit, poultry, seafood, dried food, eggs and dairy products.

With this mode of cooperation, METRO assists the farmers and agricultural companies that form the core of its supply chain to control food quality at its source. Removing food that contains pesticide residues and hormones guaranteed that athletes avoided the impact of residues on the results of drug tests.

In addition to ensuring safety at the source, METRO secures the maximum freshness of food with its unbroken cold chain storage to guarantee product quality during delivery to wholesale centers.

It owns a "seamless" cold chain that covers national supply channels across China, the longest of which runs 2,600 km from Shanghai to Kunming.

Furthermore, with the HACCP system, METRO comprehensively checks overall processes in the distribution centers and temperature control during transportation. HACCP also enables the company to monitor the reception, storage and sale of goods in wholesale centers..

It allows the assessment, analysis and control of the risks at critical points during food production and processing, thereby minimizing food safety hazards throughout the whole process and ensuring the highest product quality.

With its sophisticated and strict food safety management system, METRO has successfully supported various major international and domestic events as the designated food supplier for the 2008 Beijing Olympics, the 2010 World Expo Shanghai and the 16th Asian Games in 2010.

Company profile

METRO Cash & Carry is represented in 29 countries and has more than 700 self-service wholesale stores worldwide. With more than 120,000 employees worldwide, the wholesale company achieved sales of about 31 billion euros ($40 billion) in 2011.

METRO Cash & Carry is a sales division of METRO Group, one of the largest and most international retail companies. In 2011, the Group reached sales of around 67 billion euros (86.7 billion). The company has more than 280,000 employees and operates around 2,200 stores in 32 countries.

In 1996, METRO Cash & Carry opened its first wholesale store in Shanghai. The company was among the first to gain permission from the Chinese central government to set up chain operations in all major cities in China.

Over the last decade, the company has set up operations in 41 cities, with 58 outlets throughout China. With a headcount of around 8,500 employees, the wholesaler is serving more than 3 million professional customers across the country.

Leading self-service wholesaler METRO China has been forging ahead rapidly since its first store opened in Shanghai in 1996.

After 16 years of development and excellent market performance, it now has 58 outlets across the country, with another four to be established within the year.

METRO China, with 8,500 employees, serves 3 million professional customers across the country, of which the most important are hotels, restaurants and cafes.

Statistics show that the company generated 1.5 billion euros ($1.94 billion) in sales revenue in 2011, an increase of 18 percent from 2010.

This is partly thanks to METRO China's unique business model, said the company.

Boasting a large variety of products, the company offers one-stop solutions.

The company has more than 3,000 products under six brands of its own - Aka, Fine Food, HoReCa Select, H-Line, Rioba and Sigma - and 1,000 types of goods imported from across the world.

Among its customers is Greenery Cafe, a chain restaurant specializing in Western-style food in China.

Because shrimp is a major ingredient of the restaurant's signature dish, the cafe's requirements in terms of size and quality are strict, making it difficult for the restaurant to find qualified suppliers in the market.

"METRO China came to us and solved this great headache by offering specific types of shrimp we want," said a representative of Greenery Cafe.

Since 2007, the restaurant has bought 200 tons of shrimp from METRO China, the representative added.

Another contributing factor to the wholesaler's success is its achievements in food safety, which also helped the company become the designated food supplier to the 9th National University Games of China last week.

"We have a unique combination of weapons to ensure safe food from farm to fork," said Uwe Hoelzer, president of METRO China.

The company has been helping more than 25,000 farmers and 1,000 food producers to improve production, processing, packaging and logistics management in line with such international standards as Global GAP, IFS, and ISO 22000 since it established Star Farm, China's first agricultural consultancy company, in late 2007.

"We founded it not to make money; we did it because we could not trust a supply chain without knowing who the farmer is because of middlemen in between," said Hoelzer.

Later, METRO China and Star Farm co-developed the Traceability System, which records every step food goes through on its journey from farm to table.

By scanning a product's barcode, customers will know every detail about it - where it was grown, when it was harvested, how it was transported, when it reaches the date of expiration, and so on.

Such information is the prerequisite of food safety and will help enhance customers' trust.

Now the company owns more than 2,500 traceable products, including meat, fish, dairy products, fruits and vegetables.

"This helps reassure us that METRO China's products are safe now that we can trace them, say vegetables, back to the very moment they were harvested," said Shen Guanzhong, owner of Louwailou Restaurant in Hangzhou, noting that food safety is a matter of prime importance for the food and beverage industry.

In addition, METRO China employs unbroken cold-chains to ensure freshness of products delivered on the way to local wholesale centers, such as the one from Shanghai to Chengdu, capital of Southwest China's Sichuan province.

As products arrive at wholesale centers, they are received, processed, stored and sold in accordance with the requirements of the company's Hazard Analysis and Critical Control Point system to ensure their safety and quality.

To maximize the effects of the system, METRO China also provides training courses to its customers.

Thanks to its food safety management system, METRO China has served as a designated food supplier for a number of international and national events, including the 2008 Beijing Olympic Games, 2010 Shanghai World Expo, and the 16th Asian Games in 2010.

Trader support solutions

In addition to expanding its own presence across the country, METRO China is also helping to sharpen the competitive edge of small and medium-sized retailers, another major section of its customers.

These independent retailers, which number around 2 million in the country, are facing fiercer competition as large international ones are attracting more and more customers, according to the company.

In last August, METRO China launched the Trader Support Solutions program in Wuxi, East China's Jiangsu province.

Through the program, local retailers can enjoy a wide range of free services.

For example, METRO China will help analyze their strengths, locate their target customers, suggest products to offer and improve their shops' layout. They can also solicit professional suggestions on other relevant issues, such as how to work out promotion plans, to increase their sales.

"This is a new 'triple-win' cooperation model, as it benefits retailers, METRO China and suppliers," said Hoelzer.

"These customers can purchase quality products from METRO China at competitive prices. METRO China can further increase its sales revenue, and suppliers can increase their profits by reducing the cost of trader management," said Hoelzer.

"Most important of all, through the program METRO China helps small mom and pop shops to survive and succeed in the fierce competition," he added.

Preliminary statistics from METRO China show that the program can help those small retailers and grocers increase their sales by 40 percent, their customers by 20 percent and their profits by more than 10 percent.

Now that the program has begun to bear fruit in Wuxi, Metro China plans to try it in Nanjing, capital of Jiangsu province.