Japan rolling stock maker China regrets

[bikkuri bahn]

Well, it looks like JR Central Chairman Kasai was right (though anyone could see this coming):

 

http://www.ft.com/cms/s/0/60da2222-8ab5-11df-8e17-00144feab49a.html

 

telling quote:

Kawasaki Heavy declines to comment on the licensing deal or its aftermath, although it confirms that it is no longer co-operating with Sifang on high-speed rail.

[Guest ___]

I cant read the article without registering.

[bill937ca]

Another telling quote.

 

"Yoshiyuki Kasai, chairman of Central Japan Railway, says he warned KHI not to pursue a deal that could end up creating a low-cost competitor.

 

“They didn’t take our advice. I think it’s been a bitter experience for them too,” says Mr Kasai, whose company runs high-speed rail services and plays a role in developing trains and other parts of the Shinkansen system such as signalling.

 

While the JR Central chairman is known as a conservative critic of communist China, he is not alone in his anger at KHI’s decision to allow access to core Shinkansen technology."

 

But then again this may spur the Japanese onto new technical developments so the technology the Chinese copied is no longer their current HSR technology.

[bikkuri bahn]

I cant read the article without registering.

 

Sorry, yeah this is the problem with linking to FT articles, which otherwise are pretty good on rail matters (much better than general US newspapers, WSJ excepted).  You may be able to access the article by doing a direct search using the article title as keyword. It's: Japan Inc shoots itself in foot on bullet train

 

But then again this may spur the Japanese onto new technical developments so the technology the Chinese copied is no longer their current HSR technology.

 

Good point.  The E2 is an old design, though serviceable still.  JR East's crown jewels are the E5/E6 of course.  And JR Central is carefully guarding their N700 design from inquisitive engineers from the middle kingdom, or so I hope.

[to2leo]

I am influenced and taught to look at the Big Picture and view from different POVs so here is my comment.

 

I would commend China, at least the nation is willing to pay for technology transfers.  This will benefit both sides as the company from the developed nation got the contract and the funding for further research and development from a developing nation.  I hope this will also set the precedence for other developing nations to follow so that it can finally helps its people out of poverty with newly purchased knowledge and new trading network.  In a way, this is a form of foreign aid but a workable one...sort of like following the philosophy of 'Give a man a fish, he eats for a day. Teach a man to fish, he eats forever.'

 

I also don't think this is a one way transaction because an increase in communication and trade brings an increase in understanding and wealth between the nations.  After all, the top 10 most powerful cities or nations in the world are there because of their ever expanding trading networks with other nations of the world.

 

Finally, if you look at the train makers, the biggest ones are those who are willing to share their technologies and adopt this new business method while the one who complains are the one who gets left behind.

[Guest ___]

I am influenced and taught to look at the Big Picture and view from different POVs so here is my comment.

 

I would commend China, at least the nation is willing to pay for technology transfers.  This will benefit both sides as the company from the developed nation got the contract and the funding for further research and development from a developing nation.  I hope this will also set the precedence for other developing nations to follow so that it can finally helps its people out of poverty with newly purchased knowledge and new trading network.  In a way, this is a form of foreign aid but a workable one...sort of like following the philosophy of 'Give a man a fish, he eats for a day. Teach a man to fish, he eats forever.'

 

I also don't think this is a one way transaction because an increase in communication and trade brings an increase in understanding and wealth between the nations.  After all, the top 10 most powerful cities or nations in the world are there because of their ever expanding trading networks with other nations of the world.

 

Finally, if you look at the train makers, the biggest ones are those who are willing to share their technologies and adopt this new business method while the one who complains are the one who gets left behind.

 

While we're at it, let's just make it easier for N. Korea, Iran or anyone else in the develop safe nuclear power from the original blue prints for three mile island. Lord forbid, good intention could lead to reverse engineering for other applications.  Of course, I always thought Nigeria or Uganda could benefit greatly if it learned the secrets of the Colonel's secret recipe of 11 herbs and spices.

[to2leo]

While we're at it, let's just make it easier for N. Korea, Iran or anyone else in the develop safe nuclear power from the original blue prints for three mile island. Lord forbid, good intention could lead to reverse engineering for other applications.  Of course, I always thought Nigeria or Uganda could benefit greatly if it learned the secrets of the Colonel's secret recipe of 11 herbs and spices.

 

BTW, who invented the nuclear bomb?  Who used the nuclear bombs to destroy Japan's Hiroshima and Nagasaki?

Oh China, India and Russia have the nuclear technology for years but did we see them use it on another nation?

Even Nazi Germany did not do such a thing.

 

It is much easier to complain than to find a solution.  Nigeria and Uganda have much richer history and culture than McNations and KFCountries.  Perhaps you should read up a little on their history before you include them in your list.

 

That also goes for N. Korea, why was it formed?  Who stir the pot in Korea first in the 1500s and the 1800s?  Who pry their hands into Korea after the defeat of Japan in 1945?

[bikkuri bahn]

I think the issue here is not technology transfers, which the Chinese of course paid for and foreign vendors were more than willing to do, but rather the Chinese turning around and selling the same technology to foreign markets at much lower prices than competitors, while claiming total 100% Chinese developed technology, or in the words of some engineers there, "absorbed" or "digested" from abroad and then "improved".  Technology transfers, according to my understanding, are agreed upon with the rules that such technology be used in products for domestic markets only, and not be marketed later abroad.  Of course, this can be interpreted in many ways, and the Chinese likely use a "loose" version of that.

[to2leo]

Not in China's defense but a little more info into the technology transfer.  This is how China gets around the technology transfer, purely business and policy and finding a loophole within the fine prints.

 

From Agence France-Presse (An independent News Agency dated back to 1835)

China looks to become global player in railways

By Joelle Garrus (AFP) – Apr 13, 2010

BEIJING — Once a gold mine for a select few foreign railway construction companies, China is now looking to compete with the global conglomerates that helped build its rail lines in the first place.

Chinese firms are already building high-speed rail links in Turkey and Venezuela, but the railways ministry has said it wants to export "Chinese technology" to North and South America as well as Europe.

In Saudi Arabia, the German giant Siemens is said to have forged an alliance with a Chinese consortium for a high-speed rail link between the holy cities of Medina and Mecca, after realising it could lose the tender to the consortium.

The move highlights the emergence of Chinese firms as major players on the railway scene, helped along by government financial support.

Foreign companies are not just competing with individual Chinese firms, they are coming up against a Chinese government eager to develop its rail sector and pouring money into state firms to do it, said Ren Xianfang, analyst at IHS Global Insight.

But "on a stand-alone basis, domestic firms in China are obviously still not in the same league as their overseas peers", Ren said.

The vastness of China's own rail ambition is another asset. The government plans 120,000 kilometres (74,400 miles) of track by 2020 -- up from 86,000 kilometres now -- and more than 40 percent of it would be high-speed links.

In December, China inaugurated the fastest high-speed railway in the world between Wuhan in the centre of the country and southern Guangzhou. Thanks to foreign technology transfers, its average speed is 350 kilometres an hour.

"In a few years, half of the world's high-speed mileage will be in China," said Frederic Campagnac, founder of consulting firm Clevy China, which specialises in the transport and construction sectors.

"They are also building the most rolling stock at the moment," a sector that is "not entirely automated and requires a qualified workforce. China is acquiring know-how fast," he said.

However, according to a source working for a European railway firm who asked not to be named, the Chinese "still need foreigners for high-speed railways".

In Chinese-foreign teams such as the alliance in Saudi Arabia, "one can imagine that China brings low-cost production for mechanical parts, and Siemens contributes high-technology and the high-end image", the source said.

"For the moment, we're in a classic pattern -- the Chinese copy what is easy to copy but can't manage to master the overall system."

Still, their presence is a growing challenge to traditional giants -- Canada's Bombardier Transportation, France's Alstom, and Siemens.

Together with the Japanese firm Kawasaki Heavy Industries, they have helped China build 6,550 kilometres of high-speed links thanks to technology transfer, but now find themselves largely on the sidelines of the Chinese market.

Last year, the head of Alstom Transport, Philippe Mellier, even called on Western countries to refuse to buy Chinese trains, denouncing the Asian nation's gradual shutting down to foreign suppliers.

Technology transfers normally come with clauses saying that the savoir-faire acquired by Beijing can only be used on Chinese territory, but the European railways firm source said the country has found a loophole.

"Their method is that they change five percent of the system, and then say they have redeveloped it," the source said.

"It is very hard to judge whether the corporate strategy of 'technology for market' is a wise decision at this moment," added Ren.

"While foreign companies have virtually created competitors of their own through technology transfer, they should have also gained handsomely from their entry into the China market."

[bikkuri bahn]

"While foreign companies have virtually created competitors of their own through technology transfer, they should have also gained handsomely from their entry into the China market."

 

This is a good point.  I find it difficult to believe that the foreign companies involved in HSR in China were really so surprised to see the Chinese start so quickly to market their HSR product in other countries.  The fact is, the HSR market is huge in China, and companies wanted to cash in on that boom before the economy crashes (if the technocrats in Beijing can't prevent such an occurrence).  The other new HSR markets are still in the conceptual/planning stages ("full of potential, and always will be"...to paraphrase a quote made about, ironically, China)- China is a sure thing for now.

[bikkuri bahn]

In related news, Bombardier wins a contract to supply an additional 40 CRH1 trainsets, valued at $761 million:

 

http://www.railwaygazette.com/news/single-view/view/10/fourth-order-for-crh1-high-speed-trains.html