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Companies begin locomotive components production
Date: 2011/8/1 Click: 1949
Changzhou CSR GE Diesel Engine Company Ltd (CGE), a 50-50 joint venture between General Electric Transportation of the US (a subsidiary of General Electric Co) and China South Locomotive and Rolling Stock Corp Ltd (CSR) started production of locomotive diesel engine components on Friday, to tap opportunities in the Chinese rail market.
The joint venture manufactures turbochargers and power assemblies for GE's 16-cylinder Evolution engines which power China's mainline freight locomotives assembled in-country, according to GE's statement.

The move comes after last week's fatal crash involving two bullet trains in the east of the country triggered a negative impact on the business prospects of listed rail companies.

Shenyin & Wanguo Securities on Monday downgraded their ratings for CSR and China North Locomotive and Rolling Stock to "neutral".

Earlier media reports said GE Transportation has been also involved in supplying signaling equipment for China's high-speed rail network.

However, the company released a statement saying: "GE Transportation has not supplied any signaling equipment to any high-speed rail line in China. We did not supply the signaling equipment on the high-speed rail line involved in Saturday's crash."

Analysts said a slowdown in investment in China' railway infrastructure is possible after the accident provoked negative publicity.

China has adjusted the pace of investment in the railway network after Liu Zhijun, the former minister of railways, was removed from his position during a corruption inquiry. The Ministry of Railways announced in May that infrastructure investment in the sector this year will reach 600 billion yuan ($93 billion), a decline of 100 billion yuan from previous estimates.

Meanwhile, industry experts warned that the crash threatens to undermine the country's plans to export high-speed train technology.

"I think the Chinese railway's export business will be affected because overseas clients may have doubts about the quality," said Yang Hao, a transportation professor at Beijing Jiaotong University.

CSR signed an agreement with General Electric in December 2010 to establish a 50-50 joint venture to manufacture high-speed trains in the United States, using Chinese technology, and to jointly explore the US high-speed railway market.

California is to build a 1,100-kilometer high-speed rail system and China would like to be involved, but it faces competition from Japan, France, Germany, Spain, Italy, Belgium and South Korea, US media reported.

China operates a high-speed rail network with a total length of 7,531 kilometers, the world's longest. With a budget of 2 trillion yuan, the network will serve more than 90 percent of the population by 2020, according to the government's blueprint. Apart from developing the domestic market in response to fast-growing demand, the nation has also made strides to tap the global market.

China has signed agreements for bilateral cooperation on railways with more than 30 countries since 2003, including the United States, Russia, Brazil, Saudi Arabia and Turkey.
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