1.
INNOVATIONTHROUGH
UNDERSTANDING OFTRANSFERRED
TECHNOLOGY IN CHINA
Lim Chen Pin Kenneth

2.
WHAT DOESTHIS MEAN?

3.
Technology
leaders
Technology
transfer
Understanding
the technology
Innovation
exploiting
imported
know-how
compete
THE PROCESS

4.
WHY IS CHINA ABLETO DOTHIS?

5.
GOVERNMENT’S SUPPORT
AND
NATION PLAN

6.
China’s high speed railway
https://www.youtube.com/watch?v=_j2yT5SIaDQ

7.
WHAT IS A HIGH SPEED RAIL?
Rail transport that operates
faster than traditional rail
and runs on dedicated
tracks combined with
specialised locomotives

8.
1. JOINTVENTURE REQUIREMENT

9.
FOREIGNTECHNOLOGYTRANSFER
• Joint venture with local companies
• conform to China’s standards and assemble units locally
• ability to self develop next generation of trains without their
partner’s involvement

10.
RAPID DEVELOPMENT
• around 200 sets made in China in just 2 years
• By September 2010, trains are able to travel at 200 to 250
km/h for 2,876 km

11.
2. RETURNS OUTWEIGH RISKS

12.
HISTORY OF CHINA’S HSR
• World’s longest network of
16,000km track length
• introduced on April 18, 2007
• 2.49 million ridership in 2014

13.
KAWASAKI AND CSR ISSUE
• ended cooperation in 2008 after 2 years into Joint
venture
• ability to build models without external assistance
• case of over-reaction as contracts are signed
between Japan and China for the venture

14.
MULTI PROJECTS AWARDEDTO JV
• 2005 - Bidding for 350km/h trains
by Siemens and CNRTangShan
• 2007 - 70 sets to increase
transport capacity
• 2008 - 400 new generation trains
from Bombardier and Siemens
• 2010 - announcement of “super
speed” railway R&D

15.
3. GOVERNMENT’S SUPPORT
AND FUNDING

16.
INVESTMENT FUNDING
• $22.7 billion in 2004
• $26.2 billion in 2006 and 2007.
• $49.4 billion in 2008
• $88 billion in 2009.
• $300 billion planned expenditure to build a 25,000 km
HSR network by 2020

17.
SIGNIFICANT COMMITMENT RISK
• From 2008 to 2010, the debt-to-asset ratio
increased year on year.
• In 2011, the total debt of the MOR is ¥2.09 trillion,
which is ~5% of China’s GDP
• Wen Jiabao gave vote of confidence to the
industry in late 2012

18.
CHINA RAILWAY SPEED UP CAMPAIGN
( )
No. Year ≥ 120 km/h ≥ 160 km/h
1st 1997 1,398 752
2nd 1998 6,449 1,104
3rd 2000 9,581 1,104
4th 2001 13,166 1,104
5th 2004 16,500 7,700
6th 2007 22,000 14,000

19.
4. RAPID ESTABLISHMENT AS
GLOBAL MARKET PLAYER

20.
CONCENTRATED RESOURCES
• Merger of country’s top train manufacturers, CSR and
CNR into China Railway Rolling Stock Group
• exporting technology to countries like Mexico,Thailand,
United Kingdom, India, Russia andTurkey
• Advantage of the combined rail and train industry
capabilities for an all-in-one integrated project

21.
INNOVATIONTHROUGH UNDERSTANDING OF
TRANSFERREDTECHNOLOGY IN CHINA
1. JOINTVENTURE REQUIREMENT
2. RETURNS OUTWEIGH RISKS
3. GOVERNMENT’S SUPPORT AND FUNDING
4. RAPID ESTABLISHMENT AS GLOBAL MARKET PLAYER

22.
MISC

23.
OVERVIEW
• History of China’s High Speed Railway (HSR) dream
• Innovation and initiatives that made HSR successful in China
• China’s from zero to competitor story
• Challenges faced and the future of HSR

24.
WHEELSVS MAGLEV
• debate ended in 2004 with
the Mid-to-LongTerm
Railway Development Plan
• Lower cost
• no proprietary technology
• safety consideration

25.
OPERATORS
CHINA RAILWAY CORPORATION