CHINA's railway development strategy continues to dominate the agenda in east Asia, with its quite staggering domestic achievements over the last 10 years not likely to slow in the next 12 months.
According to IRJ research, the country is on course to open a further 442km of high-speed lines - the 362km Zhengzhou - Xuhou and 82km Changzhou - Zhangjiagang links - in 2016 after it was due to open 2351.5km of lines in 2015. This included the 859km Datong - X'ian line, 511km X'ian - Chengdu line, and the 288km Harbin - Qiqihar line. The 1175km Changsha - Kunming line is also currently under construction and is expected to open in 2017.
The four north-south and four east-west corridors which form the backbone of China's high-speed network were virtually complete by the end of 2015, with further projects intended to close any important gaps
in the network which is now closing in on 18,000km.
As the high-speed network nears completion, attention is shifting to developing and completing inter-city and upgrading conventional main lines. Combined with the high-speed network, China's passenger system will consist of 50,000km of lines by 2020, connecting most of the provincial capitals and cities with populations in excess of 500,000.
Extensive work is also taking place within these cities. Another 684.1km of metro is expected to open in 2016. Highlights include the first metro lines in Wenzhou, Nanning, and Hefei, while three new lines will open in Beijing including the 50km Line 16.
In addition a more modest 29.9km of light rail is expected to open during the year, the 18km Line 2 in Suzhou and 11.9km Line 1 in Shenzhen. However, work on several key projects is expected to get underway which will contribute to plans to develop more than 2000km of lines up to 2020. Light rail is playing an increasingly important role in improving transit connections with metro networks and providing high-capacity transit in cities where building metros is deemed too costly and time-consuming.
China's domestic development has underpinned the rise of Chinese firms to the top of the global rolling stock manufacturer rankings, a position that was cemented following the merger of the two domestic companies, CSR and CNR, to form CRRC in 2015.
Domestic orders account for 88% of CRRC's sales. However, with railway technology one of 10 industries that the Chinese government is developing to achieve its goal of becoming an advanced industrialised economy, international expansion is a major part of the new company's strategy.
CRRC is targeting Yuan 16bn ($US 2.5bn) in international sales up to 2020, and with other domestic suppliers also looking to expand overseas, China is aggressively pursuing opportunities to support infrastructure development that will provide domestic companies with the platform to export their technology.
Neighbouring markets in east Asia are obvious targets to fulfil this and the government's "One Belt, One Road" strategy which aims to build a network of railways and roads to improve links from Asia to Europe. Indeed projects in Thailand, Myanmar, Vietnam, Laos, and Indonesia, to name just a few, which have struggled to get up and running in recent years, now have new impetus following recent Chinese commitment, or apparent intention, to invest.
In Thailand, the government signed a memorandum of understanding with China on December 19 for a Baht 400bn ($US 11bn) project to build a new 873km electrified double-track standard gauge line, a key component in the proposed trans-Asean corridor from China to Singapore. The project consists of a 734km line from Nong Khai, near the border with Laos, to Map Ta Phut in Rayong on the Gulf of Thailand, with a 133km branch from Kaeng Khoi to Bangkok. The precise costs of the project, and the terms of the loan, are still under negotiation.
In Laos, a groundbreaking ceremony was held on December 2 to mark the formal start of construction on a 417km north-south standard-gauge line from the border with China at Louang Namtha to Nong Khai where it will connect with the Thai project. The line is budgeted at $US 6.8bn, of which the Chinese and Lao governments will fund 40%, with China taking a 70% share of this contribution. Various state enterprises and low-interest loans from China will fund the remainder of the project, which will serve as a southern extension of the under-construction 504km link from Yuxi near Kunming to Mohan on the border with Laos.
Construction is also underway in China of a 330km line from Dali to Ruili on the Myanmar border. However, following local opposition, in July 2014 the Myanmar government cancelled the proposed standard-gauge line from Ruili to Kyaukpyu on the Bay of Bengal which China had offered to fund in exchange for a 50-year operating concession. Vietnam is reportedly in favour of connecting with the recently-completed standard-gauge line from Mengzi to Hekou on the Chinese border but is yet to develop firm plans for the project.
Perhaps the most noteworthy recent deal in the region relating to high-speed technology was signed in Indonesia on October 16. Indonesia's National Development Planning accepted a $US 5.5bn bid from a Chinese consortium to build a new 140km 250km/h railway between Jakarta and Bandung, construction of which was due to begin by the end of 2015 and conclude in 2019.
This dealt a significant blow to Japan's ambitions to supply the potentially lucrative Indonesian market.
While apparently in pole position for the project throughout its development, Japan was foiled at the last hurdle by Indonesia refusing to structure the project with any budget, guarantee or state capital, a condition that Japan could not accept. China's willingness to overlook this and develop the project entirely at its own risk speaks volumes for its desire to export railway technology wherever it can, even when it encounters high financial risk.
However, Japan hit back in a big way on December 12 with the announcement that it will supply Shinkansen technology for India's inaugural high-speed line, the 505km standard-gauge 350km/h Mumbai - Ahmedabad line. Budgeted at Rs 988bn ($US 18.6bn), Japan will finance 80% of the project through a 50-year Yen loan with a moratorium of 15 years on repayment at an interest rate of 0.1%. The loan comes with the stipulation that 30% of rolling stock is supplied by Japanese suppliers.
Japanese International Cooperation Agency (Jica) carried out the feasibility study of the line, design and bidding for which will be completed by 2017 followed by construction up to 2023, and equipment procurement between 2018 and 2023. Testing commissioning and inauguration are slated for 2024.
The announcement is a real coup for Japan and surely leaves it in pole position to secure further contracts for Delhi - Mumbai, Delhi - Kolkata, and Mumbai - Kolkata corridors, which are potentially far more lucrative and reliable than further Indonesian deals.
China may now ramp up its efforts to secure the long-anticipated high-speed line between Kuala Lumpur and Singapore, which is the next likely Asian railway arena for the two old rivals to battle it out.
The land transport authorities of Malaysia and Singapore said at the end of November that they have received 98 responses to the request for information for the 330km project. European companies made up 56 respondents, with 13 from Malaysia, seven from Singapore, and 13 from east Asia, with the rest coming from North America, Australasia and the Middle East.
China has regularly expressed interest in the $US 14.9bn project and as competition heats up, announced a $US 10bn commitment to infrastructure lending in southeast Asia during the 18th Asean-Japan summit in Kuala Lumpur in November.
Despite its Indian success, Japan has vowed to halve the time it takes to approve infrastructure loans and to take on more financial risk with an apparent understanding in Tokyo that it can no longer rely on its track record for better quality, safety and social and environmental protection than China. In addition, land, infrastructure, transport and tourism minister Mr Keiichi Ishii promoted the Shinkansen during meetings with Singaporean transport minister Mr Khaw Boon Wan and Malaysian prime minister Mr Najib Razak ahead of the conference, with Najib also taking a ride on the Tohoku Shinkansen during a visit to Japan in May.
With the governments of Singapore and Malaysia expecting to finalise the commercial model and procurement approach for the project by the end of 2015, ahead of the tender in 2016, it is set to be one of the key contract awards of the year. It will also be another key indicator of whether China can deliver its ambitious export agenda, or if Japan can land another key contract.