Business / Companies

Taizhong does heavy lifting for China's industrial sector

By Li Yang in Taiyuan (China Daily) Updated: 2014-02-25 07:29

Shrinking profits

"The profit margin for normal wheels and axles is narrowing fast. The new workshop for high-speed train equipment opened up bigger new markets for us," said Ren Xueyi, head of the new railway industry park.

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China's high-speed railway network only came into existence in 2004. By last year, it had 100,000 kilometers of track, much more than was forecast in 2004. Analysts forecast the size will double in just a few years.

Ren said: "If the axle and wheel set production lines pass trial operations successfully, China can reduce its imports by a large margin."

Taizhong obtained quality certificates from European authorities in 2012 and became the first Chinese exporter of high-speed train wheels, axle and wheel sets to Europe.

But Ren said that entering the global wheel industry "showed us how far our equipment manufacturing industry lags behind foreign companies. The gap is all-encompassing, from concept to material."

But just acquiring foreign companies or technology won't fully solve the problem.

"Enterprises cannot improve their innate research and development abilities simply by buying equipment or enterprises," Ren noted.

"After our domestic competitors follow suit, buying up advanced production lines, the high-speed wheel and axle market will again feature vicious price competition."

Sun Ruisheng contributed to this story.

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