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Special> Boao Forum for Asia 2015> Exclusive
UPDATED: February 9, 2015 NO. 7 FEBRUARY 12, 2015
New Frontiers in Exports
China sends railway, nuclear power and other equipment sales to foreign markets
By Wang Jun

Gao Zhenting, counselor of the Department of International Economic Affairs of the Ministry of Foreign Affairs, said high-speed railway exports will effectively boost China's overall exports of goods, technologies and services in both the high-end and low-end markets as well as accelerate the development of many other related industries such as mechanics, metallurgy, construction, power, electronics and information technology. It is estimated that for every kilometer of high-speed railway built, more than 600 job opportunities will be created.

The international high-speed railway market will see robust growth over the next 15 years. Countries such as the United States, Russia, Malaysia, Singapore, Brazil and Turkey have all made plans to build high-speed railways, and France has also planned to extend its high-speed railways by 2,000 km. A report by Economic Information Daily said Chinese companies have signed high-speed railway contracts with more than 50 countries and regions.

Progress has also been made in the export of nuclear power equipment. In January, China and Pakistan entered into an investment agreement amounting to $34 billion, in relation to the construction of large-scale nuclear power plants, subways and light rail stations.

"China has gained some experience in the construction and operation of nuclear power projects in the overseas markets, and some of these projects are using China-made equipment. China's nuclear equipment manufacturing has the capability to go global, which will help boost China's economic growth, Zhao Chengkun, Vice Chairman of the China Nuclear Energy Association, told Economic Information Daily.

Watch out for risks

Experts suggest Chinese companies guard against possible risks when investing abroad.

"China only started outbound investment not so long ago. The amount of investment is small, and more importantly, we have inadequate experience as a latecomer. We have limited understanding of the global market and need more qualified professionals for international business," said Zhang. "To expand overseas direct investment, China must make its strategic plans, develop independent technologies and brands and draw up cooperation strategies in the financial sector."

Zhang Xiang, spokesperson of the China International Contractors Association, said Chinese companies will see several opportunities to go global in 2015, but they still face various challenges.

Market competition will be more intense. The increase of labor costs in China and the appreciation of the yuan will weaken Chinese companies' advantages in terms of production costs, and they still need to improve industrial cooperation and management practices.

Security remains a worry for many Chinese companies. In some Asian and African countries, political, economic and security risks have increased. In some markets, security will present a challenge for some time to come.

Chinese businesses also need financial and tax support as the current financial and taxation systems are unable to fully meet their needs in going global. The government must further strengthen financial and taxation support through methods that reduce financing costs and reform taxation on overseas revenues.

Miao Rong, Deputy Director of the Research Department of the China Enterprise Confederation, said nuclear power, ultra-high voltage grids and high-speed railways are becoming the new "calling cards" of China. However, Chinese companies still experience some difficulties in developing international business. For instance, they need more financial support, but China's financial system is not sound and effective enough to offer such support.

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