November 14, 2015, by Tony Hong

Will Chinese trains come to Britain?

By Dr Yuefan Xiao

Postdoctoral Research Fellow at the University of Amsterdam.

The internationalisation of China’s High-Speed Rail (HSR) has gone a long way since 2010 and it epitomised China’s soft power as an ascending nation not only of great growing but innovative potential. Recent months have seen a sequence of international endorsements of China’s railway prowess, evidenced by agreements between China and Russia, Hungary, Serbia and Indonesia respectively, on the adoption of Chinese HSR solution in these countries. HSR again featured prominently in the media coverage of President Xi Jinping’s state visit to the UK. It has been speculated that Chinese made trains making way into Britain is only a matter of time. Yet apart from the expression of interests from both sides, no deal of a substantive nature was struck. The Chinese delegation even had no railway official or business leader joining.

Only about a month ago, George Osborne opened the bidding process for HS2 specifically in China. The hesitation to commitment from the Chinese side is somewhat unexpected as it actually offers a compelling case from a technical point of view. China currently has more than 17, 000 km of HSR, more than the rest of the world put together. Within this extensive network, many lines were constructed to cut through challenging terrains such as karst area, plateau, frozen soil and desert. China’s CRH380 series high speed trains are also record holders of highest operating speed (around 300km/h) in commercial rail service worldwide. These trains look competitive especially given their moderate cost in comparison with those of European and Japanese train manufacturers. Apparently, Chinese companies are well-qualified to bring their HSR solution to Britain.

But bear in mind that building infrastructure like railways always requires consideration beyond technical capability. Legal and institutional contexts are equally important. These are the short planks for Chinese companies that could potentially obstruct their successful operation in Britain. For example, Chinese high speed trains were largely developed through reverse engineering trainsets made by, among others, Siemens and Alstom – who have been supplying rolling stocks for Britain for decades. It wouldn’t be surprising for Chinese train manufacturers to have to face intellectual property rights disputes of some sort unless they innovate thoroughly and make trainsets that are genuinely their own. On quality control and safety standard, the difference in practice between China and Britain is also wide. Chinese companies often emphasise (if not prioritise) efficiency over safety. For instance, testing before opening alone is expected to last four years for the 192km long HS2 (Phase 1), whereas in roughly the same amount of time China finished the 1, 318km long Beijing – Shanghai HSR, including just under 6 months for testing. For Chinese companies wanting to build HSR in Britain, adherence to stringent European safety standards and connectivity protocols will entail a painstaking commitment, often over a decade. Whether Chinese companies are willing to make such long term commitment – much longer than a typical project turnaround that they are used to in China and in an unfamiliar environment – is open to question.

Moreover, domestic factors which have enabled China to complete its nationwide HSR network in a matter of a decade – be they political determination from the top with strong local government support; forced relocation in the name of public interest; lack of environmental consideration during construction – are virtually non-existent in a democratic society such as Britain. Employment relations can also become a sensitive area, especially in the unionised sector of railway. Liu Zhijun, former Chinese railway minister once (in)famously called on his fellow railwaymen to double their effort of hardworking, that in his words they should work ‘five plus two, day and night’ (literally means working round the clock). But what’s considered dedication in China may well be deemed exploitation in Britain. Previously Chinese companies attempted to circumvent labour laws of host countries by directly employing Chinese workers in order to get things done in a Chinese speed. This is not possible for the HS2 project given that most jobs will have to be created locally in Britain no matter how.

Besides, China’s astonishing speed in HSR development can be attributed to another strength of the China model, namely a high degree of centralisation, reflected in the ability to initiate sector wide mobilisation among (mostly state owned) enterprises to tackle problems in a concerted effort. In Britain’s largely privatised railway sector, companies of different sizes are more accustomed to sticking to written contracts and their own schedules than to command and control project execution. This much decentralised structure and flatter hierarchy is something that prospective general contractors from China must take into consideration.

In short, the Chinese HSR model as we know it is hardly transplantable or implementable in Britain despite of it being a successful one at home. Chinese state companies already swallowed the bitter fruit of substantial financial loss in railway projects they ran in Saudi Arabia and Turkey as a result of relying too much upon Chinese experience on foreign soil. The UK, with an extensive array of elaborate regulations as well as stakeholder scrutiny, will only make it even more challenging for Chinese project managers to deliver. HS2 is lucrative, but getting hold of it is not only a matter of making the fastest train, but also about having the soft assets of internationalised talent, language (China still doesn’t even have a comprehensive HSR specification document in English), cross legal and cultural awareness that ensure a mega project in another country can be carried out in a sustainable, responsible and inclusive fashion. Business cases can easily become political or even politicised should any of these aspects gets mishandled by a Chinese state company.

That said, Chinese railway companies will not and cannot afford to shy away from marching out to the UK in the long run. To the contrary, perhaps nowadays is the best window of opportunity that they must seize to do so. On the one hand, demand for HSR is booming, especially in places with aging railway infrastructure, including the UK; and where such infrastructure is lacking, for example, in Southeast Asia. The Chinese government has thus gone to great lengths pushing its state railway companies for internationalisation. Propelled internationalisation has been further facilitated by the Belt and Road Initiative and institutions like the Asian Infrastructure Investment Bank that help finance HSR projects in these countries. On the other hand, the UK has pledged to become China’s best friend in the West and opened its market unprecedentedly to Chinese investment and technology. This embracement and openness towards China, however pragmatically driven, is in its own right conducive to the internationalisation of China’s HSR. Once Britain – the birthplace of railway – adopts the Chinese HSR solution or even only a part of it, the symbolic demonstration effect will be significant.

As Professor Shaun Breslin of Warwick University commented in an interview with the New York Times with respect to the Hinckley Point C nuclear power station which China will invest in building, that the admittance of Chinese technology to an advanced western country such as the UK will greatly boost China’s credibility and confidence. The same applies to HSR, and will give China badly needed accreditation in international bidding competition for HSR projects, particularly against Japan. Last but not least, Britain not only invented railway, but established numerous international conventions and good practices that are widely observed today. China thus needs Britain’s experience in international development and commerce to go global as much as Britain needs China’s new money to rejuvenate its economy. Therefore, cooperation on HS2 will be a good starting point. Once it succeeds, it will cement interdependence and benefit both countries enormously in and beyond the ‘Golden decade’.

Dr Yuefan Xiao is a Postdoctoral Research Fellow at the University of Amsterdam. He is currently working for an ERC funded project ‘From Made in China to Created in China’. His research interests include: China’s politics and international relations, crisis management, the China Model and its internationalisation. He is also a long-term railway enthusiast.

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