Zhu Yi used to nap in the house five hours by train from Zhuzhou to Wuhan in central China. Now that a fast train line has reduced travel an hour and 40 minutes, you can spend more time on the sale of systems of information management.
Before, "it took three days to get a project done," said Zhu, 31, sales manager of Beijing New Technology Lanxum Co. in Wuhan. "Now it's so fast you can find a solution for the customer and go home the same day."
The view from the seat reclined Zhu shows how to press China to build a network of 16,000 passenger-kilometer high-speed for 2020 is being mainland China's industrial boom. Along the shore are excavators and bulldozers clearing land and beginning construction. That merge into a blur as expressed accelerates to 350 kilometers (218 miles) per hour.
The country is planned 2 trillion yuan (U.S. $ 300 billion) in spending are nearly as tracked by the year 2012 much like the rest of the world, even before the network is complete.
The new trains will transform the economy of China on the road made bullet trains in Japan in 1960 and 1970, according to Beijing-based China International Capital Corp., the top ranked brokerage for research in China in the survey annual Asiamoney magazine.
"China High-speed rail program is altering the landscape of consumer markets and property," said Jing Ulrich, JPMorgan Chase & Co. 's shares of China and head products in Hong Kong.
Rail Shares
China's spending has driven bullet train railway shares and a 4 trillion yuan announced in November 2008. Shares of Dalian-based China Railway Container Logistics Co. Tielong, which has rail, truck and water transportation services have increased 2.5 times since then. Erju China in Chengdu Railway Co., which designs and builds the railroads, has more than doubled.
The suppliers of rolling stock and equipment to train operators have some of the best growth prospects in the country, Anderson said Chow, a Hong Kong analyst with Macquarie Capital Securities. The overall investment in the railway industry in China a total of 3.8 trillion yuan from 2011 to 2015, about 50 percent more than in the past five years, he estimates.
Earnings growth in CSR Corp., which makes locomotives and wagons, will emerge an average of 38 percent over the next three years, "said Chow. In Zhuzhou CSR Zhuzhou Times Electric Co., which makes power systems for railways, revenue will increase an average of about 35 percent annually over the same period, he said.
Earnings certainty?
"If you look around the market in China there are very few companies that give that kind of certainty for earnings growth," said Chow.
The nation's $ 90 billion in spending on the network last year well above the $ 8 billion that President Barack Obama assigned a stimulus for U.S. fast trains earlier this year.
The difference "is a confirmation of the rise of China and an indication of the disappearance of U.S.," said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington. "We in the U.S. is doing little or nothing and pay a price in slower growth now and in the future."
Japan's bullet trains caused an "explosive growth" in retail sales related to tourism along its routes in the decade after Shinkansen services began in 1964, CICC said. less developed cities such as Hiroshima, Nagoya and Fukuoka "began to catch up with the growth of industrial production." Morgan Stanley is selling its 34.3 percent stake in CICC, four people with direct knowledge of the agreement, he said.
Fewer bottlenecks
In China, more companies are moving inland to take advantage of labor as much as 50 percent cheaper than in richer eastern areas of the country and in the lower land and rental costs. Increased rail capacity will also reduce freight bottlenecks, the bank said.
Beijing Lanxum Zhu said the bullet train helped increase sales 15 percent this year in Zhuzhou, the second largest city in Hunan, it can contact more customers.
Changsha, the population of 6 million and the capital of Hunan province, demonstrates how high speed trains are altering the landscape in central China. The Chuan Road has a wide variety of stores selling tires powder, noodles and food, typical of many towns. Just around the corner towers of 200,000 square meters of South Changsha railway station, glass curtain walls covered with a roof height of 38 feet, waved.
The arrival of trains prompted Stanley Ching bet CITIC Capital in 1500 billion yuan in the purchase of CITIC's identification Mall in the center of the city, about 30 minutes from the station. It plans to add a department store chain retail brand in the next three to five years, mostly in the cities of second and third level along the routes of high-speed rail.
Big push
"Changsha city has been very promising, but needed a big push to become a regional center," said Ching, Hong Kong director of real estate at CITIC Capital, which manages more than $ 3 billion in private capital in a telephone interview. "The high speed train is that much momentum."
industrial transformation of China can be higher than Japan due to its rail network will be larger and faster trains, according to JP Morgan Ulrich. Today high-speed Chinese train reached 486.1 kilometers per hour in the Xinhua news said it was a world record for a locomotive trade unchanged. A qualified French TGV set a world record of 574.8 miles per hour in April 2007.
"West Points of Shanghai can become part of the giant eastern China's export to the coast, and is already starting to happen," said Arthur Kroeber, managing director of Beijing-based Dragonomics, an economic consulting firm whose Clients include Fortune 500 companies and hedge funds.
All capital
China has more than 7,000 kilometers of high-speed tracks so far. In 2012, Beijing plans to have 42 lines in operation, covering 13 thousand kilometers. Within a decade all provincial capitals and cities with more than 500,000 people have high speed connections, the Ministry of Railways, said. Already, the Chinese rail system is larger than any other country, according to the Paris-based International Union of Railways.
Changsha rapid rail link allows CITIC Capital to recruit high-level coastal cities like Shenzhen to manage retail shopping centers, said Ching.
When Guangzhou-Shenzhen line opens next year, the travel time to Changsha will be reduced to about 2.5 hours from more than 9 hours. Another line will be completed in 2014, will reduce travel time between Guangzhou and Yunfu, a city of 2.6 million in the province of Guangdong, 40 minutes over 2 hours.
Sales Tableware
Companies located in Yunfu, such as stainless steel tableware manufacturer of agricultural and Group Linkfair Wen Group company, will benefit, said John Scales, transport sector coordinator based in Beijing at the World Bank. The link will help to recruit designers and research staff, as a case study of World Bank over the city that will be published next year, said Scales.
Development of China locomotive has won orders from foreign companies in Argentina, Saudi Arabia and Venezuela, and the nation is competing to build a high-speed rail in California costs more than $ 40 billion.
Beijing-based CSR Corp., the largest Chinese manufacturer of rail vehicles, plans to partner with Fairfield, Connecticut, General Electric Co. on bids for U.S. contracts TGV, CSR President Zhao Xiaogang told reporters in Hong Kong. Companies can compete for lines in California, Florida and elsewhere on the East Coast, said Zhao.
In Brazil, based in Beijing China Railway Construction Corp. and CNR of China are leading a group bidding for a line that can cost as much as 33.1 billion reais ($ 19,200,000,000).
Falling shares
The overseas expansion has brought new risks to people in the industry. Shares of China Railway Construction, builder of railroads over half of the nation, fell the most in almost two years after the October 26 expected a loss of 4.15 billion yuan in a project in Mecca Saudi Arabia rail.
Credit Suisse Group AG cut its rating on that day in the company stock to "underperform" from "outperform." China Railway Construction reported a loss of 1.36 billion yuan during the three months ended October 28 compared with a profit of $ 1.45 million yuan a year earlier.
Critics of China, including professors from Beijing University and Beijing Jiaotong University, say the high cost of the network makes it economically unviable in a country where the average urban worker made 32,244 yuan last year, less than one-eighth salary of $ 39,054 U.S. average , According to U.S. government and China.
Peking University Michael Pettis, finance professor at the network called a "trophy." Said Zhao Jian, a professor of economics at Beijing Jiaotong University in a commentary in the newspaper China Daily in April that the "blind scan" High Speed Train "high probability of becoming a debt crisis."
U. S. Railroad Bonds
The railroads played a role in the market collapse of U.S. corporate bonds in late 1800. The market had grown in stature on Wall Street and the railroad barons looked to raise money to expand into the American West. Then came an avalanche of defaults, prompting lenders to start demanding certain protections, known as covenants, written in bond contracts.
The 1870 turned out to be "a disastrous decade", as default rates reached 35 percent, according to a research project at Stanford University.
Russell Hoss, manager of the Newport Beach, California, EFE China Fund, said investors in China can do better buying companies with businesses along new lines.
"The best way to play high-speed train through branded consumer companies expanding in the inner cities that are being linked to the East Coast with new issues," he said, declining to name companies.
Increase by six
The fund of 90 million dollars of investment-linked single track is Nanjing-based China High Speed Transmission Equipment Group Co., which raised revenue for the first half of the rail supply business for more than six times to 15 billion yuan .
Kroeber said the construction of new roads to the network will free up existing lines for freight, generating enough revenue over 15 years to pay for new lines. China's rail network is "about to explode," he said.
Freight transport has doubled between Guangzhou and Wuhan from the track opened in December, said Huawu, chief engineer of the railway ministry, in an interview. The separation of the lines of passengers and cargo release seven times the capacity of transport of containers, according to Shanghai-based Shenyin & Wanguo Securities Co.
Singapore-based DBS Asset Management, who in April set up China's rail network Opportunities Fund, sees a long-term expansion.
Comfort Level
"Companies in this space will see a high level of growth over a sustained period, with Singapore-based fund manager said Chan Kum Kong, who helps oversee S DBS Asset Management 25.6 billion U.S. dollars ( $ 19.3 million). "In an environment where there is much uncertainty, we think it provides a high level of comfort."
The fund includes stock-based companies such as Fuzhou Fujian department stores Dongbai (Group) Co., Ltd., which Chan expects to post earnings growth of 40 percent over the next two or three years, partly driven for greater labor mobility driven by high speed rail links, he said.
New York, Echo Lake Capital has manufacturer specific actions in China Advanced Construction Materials Group Inc., because it is on the verge of "significant benefit of the construction in China of high-speed rail infrastructure buildup," said Administrator funds in the fields of Ephraim emailed responses to questions.
The Nasdaq-listed company, which supplies more than 50 percent of concrete for high-speed trains, is also beginning to benefit from development in the cities linked by the new lines, based in Beijing, said President and CEO Xianfu Han in an interview. Are expected to pour 1.5 million cubic meters of concrete to a town near Wuhan line driven Guangzhou, Wuhan, Zhengzhou, Han said.
"Now, business is primarily driven by the supply of concrete for high-speed rail network," Han said. "In 10 years, the story is about how to capitalize on development projects created by the network."
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