Setbacks for China’s overseas high-speed rail plans

An illustration of the high-speed rail deal between China and Mexico, which the Mexican government has now canceled
An illustration of high-speed rail deal between China and Mexico, which the Mexican government has now canceled

Beijing: The Chinese government has been actively promoting the nation’s high-speed railway projects, touting their efficiency and cost advantages in overseas markets, but the first such overseas order lasted only four days when the Mexican government swiftly and unilaterally cancelled its order.

China began promoting its high-speed rail projects in 2010 but soon faced queries over intellectual property rights and quality problems after domestic incidents. China began the second wave of promoting its high-speed rail projects overseas in 2013. This time the difference was that its promoters were the nation’s top leaders when making overseas trips.

China has cooperated with or at least conducted talks with at least 19 foreign nations about high-speed rail projects, including the United States, the United Kingdom, Russia, India, Brazil and Thailand.

So far, China has signed contracts with four countries — Turkey, Libya, Venezuela and Saudi Arabia. Of the four, only Turkey’s project has a speed of 158km/h, still well below the international standard for high-speed rail of 200km/h. The project is still restricted to partial construction, meaning China has so far yet to secure a complete contract from construction to delivery and actual operation of a high-speed rail project.

The Mexico government said it canceled the order to prevent from the outside world from questioning the legality and transparency of the bidding.

This is not the first time China’s high-speed rail projects overseas have encountered political risks. In October 2013, China signed a memorandum of understanding with Thailand about cooperation in high-speed rail projects. This was reversed after the government of Yingluck Shinawatra underwent a coup and the new military government, via its constitutional court, rejected the rail project.