Recreating their own version of the Chinese epic "The Romance of the Three Kingdoms", multinational companies from Germany, Japan and France are locked in an aggressive battle for the right to build a 1,300-kilometre high-speed railway between Beijing and Shanghai, linking the nation's capital city to its largest commercial metropolis.

Germany's consortium consists of Siemens, ThyssenKrupp and Transrapid International; Japan has reportedly formed a group composed of four work units and sent high-profile delegations to China to lobby Chinese officials; and France's Alstom has also been actively promoting its TGV technology.

The three countries have emerged as the major competitors vying to construct the massive multi-billion dollar project ahead of a predicted explosion in the mainland's high-speed railway market. The Beijing-Shanghai line simply marks the start of an ambitious railway development programme in China, with industrial insiders estimating that nearly 8,000 kilometres of high-speed railway are being planned to stoke up the country's economic engine.

The Beijing-Shanghai high-speed railway is one of the key projects included in the country's 10th Five-Year-Plan (2001-05). Although the Chinese Government has not publicly announced a firm timetable for the project, it is widely believed that the line will be finished and operating in time for the 2008 Olympic Games in Beijing.

Strong Competitors

Among the international players, the German consortium headed by Siemens AG seems to have the greatest scientific advantage, with both magnetic levitation (maglev) and conventional high-speed wheel-on-track technology in its repertoire.

"Siemens is the only company in the world that has both technologies on hand," said Hans M. Schabert, president of the Transportation Systems Group of Siemens AG.

Schabert and the top management from Siemens' Transportation Systems Group came to China late last month to sponsor the Main Line Forum in Beijing and Guangzhou. About 120 participants, including co-operation partners, railway experts and officials from the Ministry of Railway, attended the Beijing symposium, which was closed to the media.

Maglev technology, also known as Transrapid technology, marks a breakthrough in transportation. By levitating rather than rolling, an electronically-powered vehicle moves swiftly along without actually touching the track. Axles, gears and overhead contact lines, much less wheels, are no longer necessary.

Transrapid's maximum speed is 500 kilometres per hour, and its trains can accelerate from 0 to 400 kilometres per hour in less than three minutes.

However, the immense amount of investment needed to construct a maglev system has been the focus of much debate and may ultimately work against it.

Shanghai's 31-kilometre maglev line cost 9.2 billion yuan (US$1.1 billion) to build. Basing calculations on that figure, the adoption of maglev technology for the 1,300-kilometre Beijing-Shanghai high-speed line would require total investment of about 400 billion yuan (US$48.36 billion). Estimated investment for wheel-on-track technology, meanwhile, would only come to about one-third of that.

Moreover, with a one-way ticket on the Shanghai maglev line costing 75 yuan (US$9), the price to travel via maglev from Beijing to Shanghai would equal twice that of an air ticket, according to earlier reports.

But Schabert argued that "the longer the distance, the more competitive the price", indicating that both total investment and ticket costs would be adjusted on a longer line to more reasonable levels.

The decision-makers also worry that, apart from the one in Shanghai, there is no other commercially-operated maglev line in the world, prompting critics to question the system's technological maturity.

Should maglev technology be ruled out, Siemens can always shift gears to promote its more conventional high-speed wheel-on-track technology, specifically ICE 3 and Velaro.

Velaro's maximum speed of up to 350 kilometres per hour set new standards in the nearly 40-year history of high-speed rail-based transportation for passenger comfort, product design and technical maturity.

Unlike traditional high-speed trains, every second axle on the Velaro is "driven" to ensure excellent acceleration performance.

The ICE 3 system, a new line running between Cologne and Frankfurt, also reaches a top speed of up to 300 kilometres per hour.

Edward G. Krubasik, executive vice-president of Siemens AG, said China would benefit from adopting the latest in high-speed railway design, with the added advantage of utilizing the newest technology.

And a country as vast as China can easily support a railway network consisting of both conventional wheel-on-track high-speed railways and maglev lines, he adds.

While the Beijing-Shanghai line is more of a political decision made by the Chinese Government, whatever technology is adopted, Siemens is well-prepared. "We are able to go either way," said Schabert.

Unlike its rivals, Siemens has a strong presence in the Chinese market, with about 40 manufacturing plants established across the country, including a joint-venture in railway signalling systems.

In addition, the German company has also established close co-operative ties with Zhuzhou Locomotive Works in Central China's Hunan Province, one of the largest locomotive manufacturers in China.

Technology Transfer

Siemens was the first Western company to answer the Chinese Government's call to transfer advanced technology to the country, said Ernst H. Behrens, president and chief executive officer of Siemens Ltd China.

If China needs high-speed train technology, Siemens will transfer it in the same way that it transferred technology for the Zhuzhou plant, Schabert said.

Both Schabert and Alfred Berg, general manager of the Transportation Systems Group of Siemens Ltd China, said the firm has already decided to transfer its ICE 3 technology to China.

The company has also pledged to provide financial support for the project, a proposal echoed by its Japanese competitor.

In an unusual move, the Japanese side has reportedly pledged to offer China low-interest loans for construction of the Beijing-Shanghai high-speed rail project if Japan's Shinkansen (New Trunk Line) technology is adopted.

Unlike Germany, Japan was not active in technology transfer in the early days and demanded that China purchase the complete set of equipment from Japan without a commitment to effect a technology transfer.

But after China successfully developed its own China Star high-speed train with a test speed of 260 kilometres per hour several years ago, Japan changed its attitude and agreed:

• to launch technical co-operation with Chinese partners and establish the locomotive and other component manufacturing plants in China;
• to transfer part of the key Shinkansen technologies to China within about five years; and
• to provide a large part of the funding to construct the Beijing-Shanghai high-speed line.

The Tokaido Shinkansen, connecting Tokyo, Nagoya, Kyoto and Osaka, was inaugurated in 1964 as the first high-speed train in the world. Back then, the train ran at speeds reaching 200 kilometres per hour. Nowadays, the trains travel more than 300 kilometres per hour.

"Our Shinkansen has been operating successfully for nearly 40 years, carrying more than seven billion passengers. It is safe, environmentally friendly and reliable," Chikage Ogi, Japanese minister of Land, Infrastructure and Transport, said in Beijing earlier last month.

If the Beijing-Shanghai high-speed railway adopts the Japanese technology, Ogi said she was confident the project could be completed within three or four years, in time to serve the 2008 Olympic Games in Beijing.

Political Factors

Even so, memories of past Japanese military invasions and occupation still linger, and more than 80,000 Chinese people have signed an online petition opposing the use of Japanese Shinkansen technology, according to a report in China Business Weekly.

Some people in Japan are equally against transferring the high-speed train technology to China for fear that it may help the country become "too" strong.

Sa Shuli, a railway technology expert involved in the Beijing-Shanghai project, said that while nationalistic sentiment could play a role in the decision-making process, Chinese leaders were more concerned with the technical considerations.

In that case, France's Alstom may be well-positioned in the competition.

Alstom was the first to export its technology, providing Spain and South Korea with high-speed railway systems.

In addition, the company set the world record for high-speed train travel in 1990 -- 512 kilometres per hour via wheel-on-track -- a record that has yet to be broken.

While experts have a lot to say about the Beijing-Shanghai high-speed railway project, no decisions on what sort of technology will be adopted or whether German, Japanese or French know-how will be chosen have been made known to the public.

Domestic experts and foreign executives agree that the final decision will be down to the Chinese Government.

One professor has said that, in accordance with Chinese philosophy, it is possible that no party will ultimately lose out in the competition. It may turn out that the Beijing-Shanghai high-speed railway project will opt for the technology of one country but also use technologies from the other two as supplements together with China's own technological capacity. This would not only allow China to absorb the most advanced technologies from each of the competitors and reduce costs, but it would also help balance the interests of all parties involved.

For the competitors, the Beijing-Shanghai high-speed railway is just the opening chapter of the story, with much more to be written regarding other high-speed lines throughout the country.

(China Daily HK Edition September 9, 2003)