14 | Monday, March 11, 2019 HONG KONG EDITION | CHINA DAILY BUSINESS
TALKING BUSINESS Engine of South America’s rail networks By HE WEI
Belt & Road Initiative | When biz CRRC exports rolling stock, technologies, model services and expertise to upgrade Belt and innovation Road economies comes
By ZHONG NAN full circle [email protected]
China Railway Rolling Stock Corp n theory, innovation, in the or CRRC, the world’s largest railway context of business, vehicle manufacturer by sales reve I shouldn’t be synonymous nue, is riding an export boom of with simply coming up with new late. business models. But that has It exported its electric multiple proven to be the de facto driver units or EMUs to Brazil in 2012. This fueling the success of China’s was followed by orders for EMUs thriving internet sector. and freight trains to Chile last year. With a string of layoff plans The company will work with Argen being announced by some of the tina to revamp the South American bigname digital firms of late, country’s aging rail network, reflective calls are mounting for including both passenger and cargo the country to make more hard trains. core technological break It is now eager to enhance its abil throughs on top of a variety of ity to offer a clutch of railway servi novel business innovations. ces as many countries have surging To be fair, tech giants also demand to either upgrade or assured there will be major expand their railroad networks. recruitment drives and no fur Countries are acutely aware that ther layoffs this year. Be that as it modern railway networks can sup may. port trade, investment and tourism. China’s creation of some of the This is particularly true for coun The construction site of the Mekong River Bridge in Laos, which is built by a subsidiary of China Railway Group Ltd. Chinaassisted railway world’s bestknown techworld tries in South America, Central Asia, projects are covering many economies, including those in South America. XINHUA abbreviations like BAT — it is Southeast Asia and Africa that are short for Baidu, Alibaba and participating in the Belt and Road Tencent — can be pinned to the Initiative, according to Lou Qiliang, of the Belgrano Cargas cargo line ment between the two countries. It counterparts up to speed on the power of the internet. BAT have CRRC’s vicepresident. that links the port of Rosario, the has been one of the main drivers of maintenance of the new trains overhauled traditional commer “Because our global supply and China’s support, via country’s main export hub, with all this transformation,” said Fiad. equipped with computerized safety cial business models by expand value chains are well established, it Argentina’s northwest breadbasket Argentina’s rail infrastructure systems and other hightech features. ing new channels and is fairly critical for us to transform its companies and through the provinces of Santa Fe, “received no investment of any kind Cooperation between the two significantly lowering costs, the operational mode from simply credit lines, led to an Chaco, Santiago del Estero, Salta, in over 50 years”, he said, stressing countries in the railway sector is not from marketing and distribution producing and shipping rolling Jujuy and Tucuman. However, the the significance of China’s game only helping bolster infrastructure to sales. stock to other countries to deepen agreement between overall objective is more ambitious. changing support. in Argentina but also improving Even from an investor’s point ing the degree of international the two countries.” “The goal is to renovate 10,000 “The project has so far renovated transport, quality of life and trade, of view, startups featuring busi cooperation,” said Lou. km of railway track. We hope the 550 km of railroads across five prov said Luo Renjian, a researcher at ness model innovation tend to His remarks came after China Guillermo Fiad, president of Chinese companies participate and inces,” he said. the Institute of Transportation attract more agreeable investees. and Argentina enhanced their rela Argentine Train Infrastructure work with us. We have high expecta At least 70 percent of the financ Research at the National Develop Compared with thorny technical tions to boost trade, investment, tions of being able to achieve that in ing needed to renovate the railroads ment and Reform Commission. jargon, business model innova infrastructure and development of the next few years,” said Fiad. has come from China, and Argenti “As a large number of countries tion has easytocomprehend servicesrelated facilities. the aging Japanmade cars currently In July 2018, following renovation na is hoping it will “continue to still rely on trucks and coaches to story lines, lower initial capital More Chinese companies such as in use, according to Argentine Trans work, Belgrano Cargas transported increase” even more, he said. transport goods and people, the input, and relatively shorter China Railway Construction Corp port Minister Guillermo Dietrich. 180,722 metric tons of cargo, a By 2019, Argentina’s government demand for modern railroads will time to achieve economies of and China National Machinery The new trains will expand pas 20year record, according to the aims to double the Belgrano Cargas remain attractive in many parts of scale, which means quicker Industry Corp have already expand senger capacity and introduce new Argentine Ministry of Transport. line’s speed from 15 km per hour to the world,” he said. financial returns. ed their market presence in Argenti features, such as allowing passen China is contributing to the 30 km/h. Buenos Aires, the Argentine capi But such an approach is close na in the second half of 2018. gers to move from one car to anoth upgrade of other rail lines too, With China’s help, Argentina is tal, boasts a population of more to reaching its ceiling, I’d argue. To upgrade the public transporta er for better distribution of including San Martin and General also upgrading passenger rail lines than 10 million. There are more For one, the downward pressure tion system in Buenos Aires, the ridership. Urquiza Cargas, both key segments that connect Buenos Aires with out than 20 satellite cities around the of the macroeconomy, the conse country’s capital, and modernize the As China currently is supplying of Argentina’s national railway net lying areas. The Roca, Sarmiento main city, mainly interconnected by quent capital shortage as well as city’s infrastructure, Argentina’s financing, rolling stock and tech work. and Mitre lines, which serve com old urban railway lines, according to the prohibitive cost of acquiring Ministry of Transport signed a pur nologies to Argentina, Guillermo As part of the bilateral coopera muters in the south, west and north, the country’s Ministry of Transport. a new user in a largely saturated chase deal for 200 rail cars and relat Fiad, president of Argentine Train tion, Argentina is looking to acquire respectively, have been improved in Luo said the upgrades are part of market mean growth is harder ed parts from CRRC in April last Infrastructure, Argentina’s national 107 Chinesemade locomotives for the past five years with new rail cars a vision to create a “onehour met to sustain, let alone accelerate. year. It was the third carriage order rail administration agency, believes the three lines. To date, 97 locomo and other equipment. ropolitan area” in Greater Buenos The limitations are even more from the ministry. The deal is worth this bilateral cooperation will lead tives have arrived at the port of Bue In addition, Chinese technicians Aires, where faster trains could obvious when judging its about 2 billion yuan ($299 million). to stronger ties and “new develop nos Aires, along with 3,500 rail cars from Shandongbased CRRC Qing serve outer suburbs and satellite cit nature: business model innova The 200 new rail cars have been ment opportunities”. made by CRRC. dao Sifang Co are offering training in ies within an hour of big city centers. tions normally thrive on the shipped already. Once they arrive at The rail project currently centers “China’s support, via its compa Llavallol, some 33 km south of Bue local market context, meaning their destination, they will replace on renovating more than 1,700 km nies and credit lines, led to an agree nos Aires, to bring their Argentine Xinhua contributed to this story. they are hardly transferable to a different market.; they have shorter life cycles; and because of lower technical threshold, they bear higher risks of being Fujian, Shanxi show how tech will help overcome slowdown duplicated by others. A genuinely healthy enter BEIJING — Like birds pecking at restructure and upgrade its indus Fujian, testifies to the consumption prise is one that can thrive with grain, a dozen robotic arms pressed tries, economists say new momen upgrade in China driven by the rising out going public. This is clearly components onto a pointofsale or tum is emerging from the purchasing power. not the case with car ride and POS machine, checked its functions transitional labor, bolstering confi According to a report by Bain & bicyclesharing firm Didi, which and packed it into a box under the dence for the “two sessions” that will Company and Kantar Worldpanel, banks largely on cashburning supervision of a human worker. Next outline China’s development in 2019, Chinese households’ spending on campaigns to dominate the mar to the robots, it took over 60 workers a “key year” in its goal to build a mod fastmoving consumer goods, or non ket but fails to chart a sustaina to assemble the same device, used to erately prosperous society in all durable goods such as packaged ble profitability path. process card and mobile payments. respects. foods and shampoos, is expected to Industry observers are thus The two juxtaposed assembly lines As the annual sessions of China’s rise 5 percent in 2018, showing that urging “return to rationality” in at the Kingtronics factory offer a national legislature and political the trade tensions had a minimal the internet sector, which glimpse into the robotic revolution advisory body this month move to impact on China’s consumer market. implies a shift from the pursuit sweeping East China’s Fujian prov identify new engines to turbocharge The ongoing two sessions would of speed and market domina ince. Like China’s other coastal the world’s secondlargest economy, focus on the financial woes of private tion to value creation and regions, rising labor costs and dwin how to help such market players tide companies as they work on reform organic growth. dling foreign orders are galvanizing over the tumultuous transition peri and innovation. In particular, many National guidelines have also laborintensive factories into action. od is also a heated topic. small and mediumsized enterprises underlined the importance of Instead of shrinking production, “Traditional exportoriented com faced challenges in obtaining bank hardcore technological break Kingtronics chose to deploy more panies faced considerable difficulties loans, said Deng Xiaojun, assistant to throughs. robots, a strategy that not only raised during the industrial transformation A technician operates an industrial welding robot to weld automo the chairman of Datong Reciprocity For instance, companies spe the company’s profits but also in 2018,” said Huang Maoxing, an eco bile parts at a production line of Jiangxi Rongcheng Group in Group, a Fujianbased manufacturer cializing in industries such as allowed the Hong Konginvested nomics professor at Fujian Normal Fuzhou city, Jiangxi province, HE JIANGHUA / FOR CHINA DAILY of industrial valves that is breaking information technology, high firm to expand its business by design University. “But after the twinge, a into the global market of cryogenic end manufacturing, new mate ing and selling automatic equipment rebound is almost certain in 2019, valves. rials, new energy, to manufacturers that cannot afford thanks to new momentum accumu In North China’s Shanxi, coal firms mates it will save 2.4 million trees. A slate of supportive policies were environmental protection and imported robots. lated in the transition.” are switching to new energy and new Despite the temporary loss of GDP rolled out following last year’s two biomedicine will be given prior “We anticipate a market that has The transition Huang referred to is materials as the coalrich province tempo, Yan Linhu, deputy general sessions that called for reducing taxes ity on the muchanticipated sci no boundaries, as many medium now the order of the day across Chi cut redundant capacities. In the past manager of the company, spoke high and other burdens for enterprises. ence and technology innovation and smallsized enterprises welcome na. In provinciallevel “two sessions” three years, Shanxi phased out 88.4 ly of the industry’s move toward a China is estimated to have saved 1.3 board, according to regulations automated solutions,” said Henry C. that preceded the national event, a million metric tons of coal capacities healthier development model featur trillion yuan ($193.7 billion) for mar released in January. Tseng, chairman of Kingtronics, majority of Chinese regions lowered but sped up new energy develop ing a higher input of innovation. “The ket entities in 2018. Tseng, Kingtron That also explains why inter which is based in the city of their GDP growth targets for 2019 ment, including extraction of coal coal industry is under a lot of stress, ics’ chairman, believes such policies netbased companies are spar Zhangzhou. and stressed highquality develop bed methane that now accounts for but it’s a positive sign that all compa are essential for China’s real economy ing no efforts in delving into Defying the current economic ment with promises to nurture new over 90 percent of the national total. nies are seeking changes,” he said. to prosper. more fundamental technolo downtrend to register robust growth, industries and upgrade traditional One firm, Shanxi Unimoon Other good news for China’s econo “Pushing for innovation in the gies, from hosting data centers, Kingtronics and many other private ones. Green Paper, is reaping early my will come from the unified foreign manufacturing sector always setting up semiconductor arms, firms point to the microeconomic Fujian, known for its booming elec rewards from the clean energy tran investment law, which will be dis involves a lot of risks. Small firms, in to backing pureplay AI firms. tenacity of China as it struggles with tronics and garment industries, has sition. The subsidiary of a coal enter cussed during the two sessions. Once particular, have to overcome many They need technologies to keep an economic growth slowdown and seen more and more factories prise has developed a technology to adopted, it will help foster a more financial and technological hurdles, their business model innova uncertainties posed by trade friction embracing automation, leading to a manufacture paper out of gangue, a favorable business environment and so they need strong government sup tions in tune with the times. with the United States. 16fold increase of imported industri coalproduction waste. By produc attract more foreign investment. port,” Tseng said. About three years after China initi al robots in the first 10 months of ing an annual 120,000 tons of such Panpan Foods, a major supplier of Contact the writer at ated the supplyside reform to 2018. “stone paper”, the company esti packaged pastries and puffed food in XINHUA [email protected]