China, U.S. Reach Agreement on High-Speed Rail Before Xi Visit

A China Railway Group-led consortium and XpressWest Enterprises LLC will form a joint venture to build a high-speed railway linking Las Vegas and Los Angeles, the first Chinese-made bullet-train project in the U.S.

Construction of the 370-kilometer (230-mile) Southwest Rail Network will begin as soon as next September, according to a statement from Shu Guozeng, an official with the Communist Party’s leading group on financial and economic affairs. The project comes after four years of negotiations and will be supported by $100 million in initial capital. The statement didn’t specify the project’s expected cost or completion date.

The agreement, signed days before President Xi Jinping’s state visit to the U.S., is a milestone in China’s efforts to market its high-speed rail technology in advanced economies. The country has been pushing the technology primarily in emerging markets — often with a sales pitch from Premier Li Keqiang– as a means to project political influence. A $567 million contract last October to supply trains for Boston’s subway system was China’s first rail-related deal in the U.S.

The agreement also represents an important victory in China’s high-speed rail rivalry with Japan, as the two countries have competed for train contracts throughout Asia. The parent company of JR Central, Japan’s largest bullet-train maker, had expressed interest in the Los Angeles-Las Vegas line several years ago, and China and Japan are both expected to bid to supply train cars for a proposed high-speed rail line in California’s Central Valley.

“This is the first high-speed railway project where China and the U.S. will have systematic cooperation,” Yang Zhongmin, a deputy chief engineer with China Railway Group, said after a news conference in Beijing. “It shows the advancement of China-made high-speed railways.”

Full article: China, U.S. Reach Agreement on High-Speed Rail Before Xi Visit (BloombergBusiness)

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