CNR: Inside the Bullet Train's Dragon Den

Located in Tangshan (Hebei Province), the CNR

factory is an immense facility covering 75.000 square meters that puts together trains and carriages at different building stages. Its halls are equipped with the finest tools, hyper-sized ovens, 30 meter long presses, and robot welders. Arranged by the State Council, this media visit to the Tangshan factory provided reporters with a rare first-hand glimpse into the beating heart of China’s bullet train. It also matters a lot for the US, as Tangshan may become the provider of bullet trains for California whenever it completes its proposed high-speed rail network.

The atmosphere here is complex, being at the same time friendly, with smiling faces, and quasi-military. A guard is posted in front of each bullet train, discreet but ready to push back visitors who are too nosy.  While the factory is not keen on providing much data regarding its economic operation, it more than compensates for its reticence on this matter by loudly display it’s ideological/propaganda credentials.  The walls of this production facility are splashed with slogans in Chinese and English, advising workers to “blurt out technical instructions in one breath”, or “temper (themselves) hard, to be the one in one million”. Strolling through the halls, it is obvious that China has invested a heavy price to create a world-class facility in Tangshan.

All kind of passenger trains are produced here, underground metro, Intercity trains, tramways and of course the bullet train. Steel and composite materials are used in manufacturing them. Aluminum alloys are particularly favored, as they are lighter and limit vibration. CNR’s bullet train is the “little brother” of the Siemens “Velaro” bullet train.  CNR bought three sets of this train, including plans and right of reproduction.

The result is a most competitive train, the CR380B, which can attain a commercial speed of 380kph. It is a contender to Alstom’s AVE, Kawasaki’s efSET, Siemens Velaro, and both JVs of Canadian Bombardier (Talgo [Spain] and AnsaldoBreda [Italy]). Nine of those consortia are now preparing to compete in the US for an initial order of 15 to 20 trains to link Merced and Burbank in the Golden State’s proposed high-speed rail network for a “modest” initial investment of $889 million. But this will be just a first step for California:  by 2028, when the phase 1 of the statewide system between San Francisco and Anaheim is scheduled to be completed, capital spending on the project could balloon to $68 billion, which means that the winning group will be asked to manufacture both rolling stock and components in California.

The capacity of the CNR Tangshan factory now stands at 120GV of 16 cars (1053 places). The group also maintains facilities in Changchun, Beijing and Tianjin. It exports to 84 countries. On January 27^th, the first batch of 100 ‘Intercity’ trains and 34 metro trains, specially commissioned by Brazil for the 2016 Summer Olympic Games, were unloaded at the port of Rio de Janeiro. On the same day, CNR secured yet another big sales coup, being award the contract to deliver 284 new cars for the Boston subway.  

During our visit, the CNR vice CEO Yu Weiping admitted that foreign orders had been slow in coming, with the 2011 train accident tragedy near Wenzhou, which left 40 people dead, continuing to cast a long shadow over Chinese efforts to sell its bullet trains to foreign customers. Last year, CNR placed $3 billion orders abroad, and this is small beer compared to the Chinese domestic sales generated by the government’s recent investment binge.

The vice CEO also admitted that the impending merger with rival South CSR, which has been mandated by the government in order to end a ruinous price war, is far from completed.  He told us, “A working group has been appointed in Beijing… to solve the problems.” Yu also stated that CNR is “looking for foreign technology”, a discreet admission that China’s 10 year effort to bring its high-speed train industry up to international standards has yet to bear fruit and that its foreigner competitors are not keen to hand over any more their most advance research. 

This last statement of Tangshan’s manager reminded of a verdict handed down by a French expat a few years ago. This professional in the train equipment sector was lamenting the strict closure of the Chinese market, due to the iron fist of the regime:  “our Chinese partners, engineers and manufacturers would like to work with us… to share the market. It would be for them a safer way to learn, to develop their skills and avoid accidents. But they can’t do that, their bosses take their marching orders from the politicians who dream of using their internal market as a springboard to eventually take over the entire world market”.