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Prospects On China Rail Transit In 2015


On Dec 30,2014,CSR and CNRannounced a merger whichis the two biggest railway equipment manufacturing companies in China, which starts the development of rail transit industry in China in 2015. The merger of CSR and CNR is an important part of rail transit industry in 2015. In addition, as the gradually forming of railway backbone network,especially the high-speed rail,there will be more outstanding achievement in the construction of China rail.

The First Prospect: “new CRRC”Will Open ANew Era Of China Rail Transit Equipment Manufacturing

On Dec 30,2014,CSR and CNR issued a proclamation meanwhile,which announced the merger of CSR and CNR.

According to the announcement of CSR and CNR,CSR will issue new stocks to existing CNR shareholders to absorb the other company,the new entity will be called China Railway Rolling Stock Corp Ltd, or CRRC Corp.

After the merger,CRRC will not only become the world's largest high-speed rail technology suppliers,but also will help CRRC to consolidate status as the world's largest manufacturer of rail transportation equipment. Especially,the new entity will benefit from a larger,higher operational efficiency,higher R & D efficiency,lower procurement costs and a unified global strategy to achieve higher international competitiveness.

The Second Prospect: China's Railway Construction Investment Scale Will Maintain AState Of AHigh Level In 2015

In 2014,the investment in China’s railway reached 800 billion,which remains at a high level within a historical range. It is reported that China's railway investment budget will reach 850 billion in 2015. Some experts estimate that the investment in China's railways will maintain a high level trend in the next seven or eight years.

First,from October to December in 2014,the NDRC continuous approved a large number of railway investment plan,including the lines of Heshun to Xingtai,Quzhou to Ningde,Golmud to Korla,Lianyungang to Zhenjiang,Xiangyun to Lincang,Nanchang to Ganzhou. According to incomplete statistics,the railway project approved by NDRC is more than 900 billion yuan in 2014. In such a large-scale of approval,the railway construction investment will speed up in 2015 certainly.

Secondly, the Railway Development Fund has been formally established in September 2014, the scale of the first fundraising is 200 billion to 3000 billion yuan. Industry insiders estimate that the fundraising will bring more railway investment in fixed assets which is expected to reach 400 billion -600 billion annual by the effect of the capital leverage. In addition, the State Council officially issued "advice of the support to the land for integrated development of railway construction" to support the railway construction in August this year, which prescribes the policy of integrated development and use of the implementation of railway land and the regional land near station. A series of Vigorous reforms of investment and financing in 2014 will bring the guarantee and the possibility to keep a high level in the investment of China’s railway in 2015.

Thirdly,in addition to national investment,social capital will also be more actively involved in railway construction. According to the multi-aggregated data,it shows that local government leading inter-city rail construction will be the future focus of China Railway Construction in 2015 and the next few years,this also means that the relatively flexible local government will have more activities to absorb the social capital,which is welcomed by social capital.

The Third Prospect: China High Speed Rail "going out" Is Expected to Make Substantial Breakthroughs

In 2014,China’s high-speed rail was so close to achieve real breakthrough of "going out" plan. As a result of Mexican government unilaterally canceling the tender results of its high-speed rail,China’s high-speed rail "going out" plan get a profound lesson and frustration. The message that the high-rail plan was put on indefinite hold by Mexican government made a heavy blow to go abroad for China’s high-speed rail. China Railway Construction Corporation,CSR,CNR concepts stocks were almost across the board limit on February 2.

Currently,many countries are interested in Chinese high-speed rail technology,many heads of states take the high-speed rail during the visit to China which made them feel speed,safety and comfortable. Dec 23rd,2014,when Thai prime minister Pakistan Fertility took Beijing-Tianjin intercity high-speed rail,he said: "several countries want to construct Thailand railway,but we hope to continue the discussions with China."

It is understood that China and Thai are discussing some specific issues such as how to joint venture,the proportion of income distribution and the Thai side hopes as the train operator, China helps Thailand to establish repair and maintenance base and so on.Pakistani Prime Minister recommends that Thai side builds the rail by their own fund and China provides the mobile devices and communications signals system.

China’s high-speed rail "going out" plan has aroused the attention of the whole world, whether China's high-speed rail can successfully go out in 2015,it also need the joint efforts of the government,China's high-speed rail construction and equipment manufacturing enterprises.
The Fourth Prospect: The Tram Will Be Construct Intensively 

Since the tram of Shenyang to Hunnan officially opened,China’s tram has built a new milestone.So far,Shenyang,Shanghai,Guangzhou,Suzhou,Nanjing and other cities have opened tram line,which brings a new choice for the relief of local traffic pressure.

According to incomplete statistics, at present, the number of Chinese city which is currently building tram reaches nearly 40, a large number of third-tier city is becoming the main force of the construction of modern tram.

 In Kunshan, Changsha, Wuhan, Zhuhai, Shenzhen, Hefei, Huaian, Suzhou, Zhengzhou, Qingdao, Beijing, Foshan, Ningbo, Taizhou and other places, modern streetcar projects are underway in full swing, most of the cities’ tram projects have been started or completed in 2015.

After nearly two years of discussion about tram, China will emerge the boom of the tram building,and other industries which are related to trams will benefit from this. In addition, according to statistics of Chinese urban rail transit association, China tram traffic mileage will reach 2500 km in 2020.We look forward to the further development of China's trams reasonable.

The Fifth Prospect:Low-speed Maglev Transportation Achieves Commercial Operation

According to the plan, Beijing Mentougou subway line, also known as Beijing medium and low speed maglev demonstration line, which is west from MentougouShitou Ying Town east to ShijingshanPingguoyuan subway station,is 10.2 kilometers.The focus of controversy is whether the medium and low speed maglev is harm to the human body, which is also the main delay reason of the line that is originally scheduled to start in 2011 .

In addition to the Beijing Mentougou line,there is another medium and low speed maglev transportation project under construction in Changsha Hunan Province. According to the Hunan maglev transportation development Limited company relevant responsible person said, Changsha maglev traffic will be officially opened to traffic operation in the first half of 2016, and the line will become the Chinese second medium and low speed maglev transportation project which starts formal commercial operation.

In addition, medium and low maglev transportation has aroused widespread concern in many cities, it takes nearly nine years to demonstrate whether takes the form of maglev transportation for the Shenzhen Metro Line 8. 
At the end of 2015, with the official opening of the Beijing Mentougou line,there will be more people have a deeper understanding on medium and low speed maglev transportation. Whether this new traffic system is worth promoting to all of country, this is worth looking forward to.