On March 17, two presidents of China Southern Locomotive (CSR) and China CNR Corporation Limited (CNR), gathering in Johannesburg, South Africa, respectively signed a purchase order amounting to USD 2.1 billion and a purchase order amounting to USD 800 million with Transnet SOC Ltd (Transnet). This is another big move of Chinese enterprises for entering to Africa.

This is another big order after CSR signed a contract of 95 locomotives with Transnet in 2012. CSR Zhuzhou Electric Locomotive Co., Ltd. got purchase orders totaling 359 electric locomotives and concluded an additional purchase contract of 100 Electric Locomotives in 20E project, at a total contract price of over USD 2.1 million. Liu Hualong, President of CSR, took a special trip to South Africa to attending the signing ceremony and said that the client in South Africa selects CSR again, which proves the trust of African people to Chinese brand.  

“Going global”, i.e. active development of overseas market, has become a new development approach of Chinese high-end equipment manufacturing industry. The total amount of orders that CSR obtained successively in South Africa, Malaysia and Turkey in recent years exceeded RMB 20 billion, built the production bases in these three countries, involved the markets in Africa, ASEAN and Europe, and realized the “transformation and upgrading” from the output of “products + services” to the overseas development of “products + services + technologies + investments”.

CNR also benefits from the policy of “going global” and regards “Connecting the World and Leading the Future” as its future mission. In 2011 and 2012, CNR consecutively ranked the first in the world with regard to manufacturing and sales revenues of railway transportation equipment and its international market was rapidly expanded; its products have been exported to more than 80 countries and regions, and diesel locomotives, urban rails and trucks in batches have entered to the markets in the developed countries. 

Liu Hualong thought that the key for “going global” of Chinese high-end equipment manufacturing industry is to build a good reputation in the world. In the announcement ceremony of award of bid, Liu Hualong said that “We will follow high standards in the process of locomotive manufacturing to make locomotives safer, more reliable and more low-carbon, thus thanking South African clients for their support and trust.” 

     In Liu Hualong’s opinion, overseas development of Chinese high-end railway transportation equipment is realizing the global double-recognition of “Made in China” and “Intelligently Made in China”. The prerequisite of this bid inviting project in South Africa is that the localization rate exceeds 60%. When interviewed by a journalist, Liu Hualong said “South Africa’s localization request, in some sense, means occupying the market with technologies, in other words, we provide both products and technologies for them to cultivate their future ability in localized production. We will promote this project according to the contractual requirements.” He also said to South Africa’s bid inviter that “We understand your needs and aspirations and we will keep our words about localization and other aspects, realize South African locomotives made by South Africa, and accomplish CSR’s solemn commitment to the African people.” 

Xi Guohua, President of CNR, also expressed his understanding and support to South Africa’s and even Africa’s localization. He said that South Africa has formulated the supplier development plan, the localized production policy and the policy of “economic revitalization by black people. We quite understand it and the success of this project will vigorously promote the development of South Africa’s locomotive manufacturing technologies, drive the progress of related industry chains and create more jobs.”

Liu Hualong entertained a very optimistic attitude to the African market, saying CSR considers the African market as one important component of overseas strategy and will invest more efforts and investments. “The African market has a great potential and our products are applied quite well in Africa.” He did not worry about the output of core technologies and thought “localization” in Africa is not threat, but more opportunities. “The local enterprises develop themselves via the output of our technologies and the technological driving also pushes the technological export of domestic enterprises.”

Although CSR has continuously signed contracts amounting to USD 3 billion in South Africa, Liu Hualong did not worry about the future development pattern, nor be afraid of the western false tone of “new colonization”. He told the journalist that “Whether entry to Africa is controversial relies on the enterprise’s own positioning. We are always adopting the cooperative mode of driving and promoting the development of local enterprises, performing the corporate responsibilities for the local society, respecting the local culture and thus realizing mutual benefit and win-win, and this is very crucial. Nowadays, our enterprises that develop the international market are cooperating with the local enterprises and people happily.”

For China-Africa cooperation, Liu Hualong expressed that “There is an old Chinese saying that ‘When brothers come together, there is nothing they cannot achieve.’ Let us work together to overcome all hardships in front of us. I hope we, with our cooperative partners, to do the production-related work well.” Xi Guohua also thought that the success of this project would not be achieved only by CNR and needs the joint efforts of local partners in South Africa. “We hope we could sincerely cooperate with our partners.”