The economic juggernaut that is the People's Republic of China plans to invest billions in the construction of new infrastructure in the coming decade. One of its priority projects is the construction of 16,000 kilometers (9,900 miles) of new high-speed railway track, designed for trains capable of travelling more than 350 kilometers an hour (217 mph).

By the end of December, people will be able to travel the more than 1,000 kilometers between Wuhan and Guangzhou in three hours rather than the normal 10. It is the first time in history that an average speed of 350 kilometers per hour has been sustained on the ground over such an long distance.

German CEOs have come to terms with the fact that China will soon be able to produce ultra-modern trains without foreign know-how. But Professor Sun Zhang, transport expert at Shanghai's Tongji University, has a more ambitious vision: to create trains that provide a viable alternative to air travel.

Catching up with planes

"China always had a dream," he told German public broadcaster ARD. "The government always talked about giving the country a basis of innovation. But up until now, we had to import. We were underdeveloped."

"It is our policy to get foreign technology, establish cooperative ventures and promote Chinese brands. Technology has no borders. For the rail industry, China is the biggest market in the world. For Germany the future is working with China."

But the role that China wants German companies to play in this happy new cooperation has been clear enough: they are the junior partners. The days when Germany delivered whole trains are long gone, and foreign engineering companies can count themselves lucky if they get to supply components.

German technology giant Siemens received a lucrative contract in March to make engine parts and chassis for 100 trains travelling on the Beijing-Shanghai route, set to be complete in four years.

Speaking in Beijing recently, Siemens boss Peter Loescher was upbeat about his firm's future in China. "The competition is already stiff," he said. "The Chinese market is an important market for us, and we're doing excellent business with our high-speed trains."

An ideal blend

But the Chinese are catching up, and poised to overtake Western firms. They are already negotiating major export deals of their own.

At the beginning of 2010, a decision is expected whether the Chinese state corporation CSR is to partner with the Canadian company Bombardier to build a high-speed train link from Canada to Las Vegas. There are big contracts in the works in Britain too. Professor Zhang believes China can undercut Japanese or German competition by 20 percent.

"Chinese high-speed trains have one great advantage: they are a blend of the best foreign technologies. We compared them all," he told ARD.

Forcing secrets out

Many German businessmen have complained that their Chinese partners have demanded they reveal every last detail of their technology. Thomas Dorn, an executive board member of the German Board of Trade in Shanghai, suspects that this says a lot about the Chinese negotiating method.

"If they demand that you reveal the technology, then you have to find a way around it," he says, "There are always back doors, and the pragmatic route is to work out how to get them to agree to manufacture in our country and then ship the products in to where they're needed."

But Marcus Malatitsch, Shanghai manager of the German Huebner company, has found doing business in China tough. Huebner manufactures walkways that link train carriages, and, in China, is forced to work together with a local cooperative that he says effectively forces him to give away trade secrets.

"In the high-speed rail industry, the Chinese don't just copy existing technology, they use it and develop the next stage," says Malatitsch. "Hitting 380 kilometers per hour – that is now being developed in China. Of course, foreigners are involved – there are foreign suppliers like us. But the official partnerships with Siemens, for example - they don't exist anymore."

Author: Astrid Freyeisen (Ben Knight)
Editor: Sam Edmonds