Bigger is better it seems in today's globalised railway industry. Indeed, during the press conference announcing the tie-up, Alstom Transport CEO Mr Henri Poupart-Lafarge referenced how the threat to the French company’s position posed by CRRC and “other Asian competitors,” had prompted the decision to join forces with its German rival.

“What matters is customer proximity and innovation,” Poupart-Lafarge said. “Together we have nice and neat customer proximity around the world, as well as capacity of innovation that is unmatched. This is where we are advanced compared with our competitors, including CRRC.”

Traditionally Chinese railway products have been dismissed in Europe for not quite meeting the tough certification standards required. But with reports in the run-up to the official announcement on September 26 citing a staggering difference of seven-times between CRRC’s research and development budget and that of Alstom, it seems that it is only a matter of time before this gap is closed, and the Chinese surge ahead.

The ascent of CSR and CNR, and now CRRC, to the top of the charts of global rolling stock manufacturers was prompted by the scale of investment in their vast domestic market. CRRC was around twice the size of its nearest competitor, Bombardier, in SCI Verkehr’s 2016 Worldwide Market for Railway Industries study, with Alstom and Siemens ranked third and fourth respectively.

However, with demand in China slowing, in order to sustain this growth, the company has been looking to compete more effectively overseas.

CRRC wants exports to account for 20% of its business by 2021, and it appears on track to achieve this target. After recording a 12% share in 2015, the Chinese company reported overseas orders of $US 8.1bn in its 2016 financial, around 15% of its total order book of Yuan 262.6bn ($US 53.74bn). In total, the company reported revenues of Yuan 224.14bn and pre-tax profits of Yuan 16.94bn during the year.

The company is clearly on the right path, and in an interview with IRJ in March 2016, CRRC vice-president Mr Weiping Yu was keen to emphasise that the manufacturer is not ruling anything out.

“Every market is important to CRRC, but all have different time requirements for when you might be able to enter,” he said.

CRRC is already active in more than 100 countries, and export successes include the supply of locomotives to South Africa, EMUs to Argentina, wagons to the UAE, and locomotives and wagons to Australia and New Zealand. Securing a contract for high-speed trains in Indonesia that was seemingly destined for Japan was also considered a major coup.

The Chinese government’s economic investment policies in the developing world, notably Africa, and Belt and Road countries, mean that CRRC is in a strong position to supply future transit and rail projects in these markets. The Chinese also seem well-placed to supply Russia’s proposed high-speed line between Moscow and Kazan.

CRRC has similarly made eye-catching inroads into the North American passenger market. An initial order for metro trains for Boston in 2015 has been followed by orders from Chicago for more metro cars and Southeastern Pennsylvania Transportation Authority (Septa) for double-deck coaches. The firm has set up plants in Boston and Chicago, and is establishing a plant in Canada with a view to supply freight wagons and equipment. It is also actively pursuing the California high-speed rolling stock contract.

And then there is Europe. CRRC has so far only won piecemeal orders on the fringes of the major national markets: it is supplying locomotives in Macedonia, electric locomotives in Serbia and LRVs in Turkey. It also won a contract to supply engineering wagons to London Underground. However, it has ambitions to breakthrough into the continent’s major arenas.

For example, the supplier is reportedly working with German Rail (DB) on certifying two shunting locomotives for the Hamburg S-Bahn. It has also regularly expressed its interest in supplying Britain’s HS2 high-speed project.

There is also the prospect of the merger with Škoda Transportation. CRRC’s Zhuzhou Electric Locomotive subsidiary confirmed in November 2016 that it was in discussions to purchase a 100% stake, although further details of the progress of these negotiations have, so far, been limited.

Such a merger would give the company a foothold in Europe which, while certainly more difficult to crack, still remains the largest in the world. The prestige of securing major order in the traditional home of the industry is also seemingly too tempting to ignore as CRRC embarks on a truly global strategy.

How the traditional European rolling stock heavyweights respond to this growing Asian threat has been a defining question for the industry throughout this decade. Clearly for Alstom and Siemens, the Tiger is now very much on their doorstep, and it is time to act.

In an era of technological change, defined by digitalisation and the fourth industrial revolution, their response is to go together to give themselves the best chance of success across the world. As Siemens' president and CEO Mr Joe Kaeser put it: "It's about playing offense and not defence." Time will only tell whether this strategy will counter CRRC's remarkable progress.