The metro programme only really got going in earnest in 2004 when a ban on new construction was lifted. China now has metros operating in 23 cities totalling more than 2700km with another 2850km under construction. Despite this massive programme, the pace of expansion is struggling to keep up with demand. Beijing, which now has the second largest metro in China, suffers severe overcrowding.

Already some of these metros dwarf systems in other major cities around the world which have taken decades to establish. If China's long-term plans come to fruition, in the next 10 to 15 years we could see the world's first 1000km metro networks, a feat unlikely to be rivalled anywhere outside China.

Of course, this investment is being driven by the transport needs of China's huge population coupled with migration from the countryside to the cities, which has led to rapid road congestion and worsening pollution, something which Chinese urban leaders are keen to resolve. China is able to fund investment on this scale from its huge trade surplus with the rest of the world, but even in China more innovative funding models are starting to be adopted.

At some point, the largest Chinese cities will need to superimpose limited-stop higher-speed transit lines on their metro networks to speed up travel between key urban centres as Paris has done with its highly-successful RER network. Smaller cities and some suburban areas are starting to build light rail networks, and this is likely to be the next area for growth.

The massive railway and metro construction programme has naturally required the supply of large fleets of new trains which has propelled China's two train builders, CNR and CSR, into first and second place in the ranking of the world's largest rolling stock manufacturers.

One might think that with such an abundant home market, CNR and CSR would be uninterested in exporting. Quite the contrary, as both companies are using their growing expertise as a springboard for export covering a wide range of vehicle types from heavy-haul freight wagons for Australia, dual-voltage electric locomotives for South Africa, metro trains for India and Iran as well as Kuala Lumpur in Malaysia, and passenger coaches for Thailand.

The announcement last month that CNR Changchun has been selected as preferred bidder to supply 284 metro cars to Boston is a major coup for the Chinese as this is their first real breakthrough in North America. Both CNR and CSR are bidding to supply the first batch of high-speed trains for California.

CNR along with rival Hitachi have been shortlisted to acquire AnsaldoBreda and Ansaldo STS in Italy. The outcome is probably more important to CNR than Hitachi, which already has a strong foothold in Europe with its expanding operation in Britain, as this will give CNR access to Europe, the world's biggest rail market.

Another intriguing development was the announcement in October that CSR Sifang, the Technical University of Dresden and the University of Stuttgart have agreed to set up a joint railway research centre in Germany.

There is another important reason for China's growing success abroad. China is more willing to take risks than its western competitors. Added to this is China's strategy to invest heavily in developing or economically-weak countries where it can see long-term benefits such as the supply of cheap minerals. For example, China has moved into a number of African countries such as Angola and Zambia not just to renovate their railways but also to develop other sectors of the economy such as farming and mineral extraction. In Argentina, China is helping to modernise the rundown rail network but is benefiting from large orders for equipment and rolling stock all financed by Chinese banks.

As we report this month, all four bidders to construct a 130km iron-ore railway in Bolivia are Chinese, and China is the sole bidder for a design, build, operate and maintain contract for Mexico's first high-speed line. Naturally, Chinese manufacturers will expect to supply the trains for these two projects.

The rest of this decade is likely to witness a big shake-up in the global railway supply industry and not just from Chinese companies. Hitachi has ambitious plans to expand in Europe and has the resources, technology and determination to succeed. But medium-sized players, such as CAF, Talgo - which will enter the lucrative multiple unit market soon - along with Stadler and Pesa, are steadily gaining ground. This is not the time for complacency or resting on past glories, but a wakeup call for the seemingly well-established players.