China, U.S. Reach Agreement on High-Speed Rail Before Xi Visit

A computer rendering of the XpressWest train.

A computer rendering of the XpressWest train.

Source: XpressWest
  • Deal is China's first contract for high-speed Line in U.S.
  • Deal to link L.A. and Las Vegas comes after 4 years of talks

A China Railway Group-led consortium and XpressWest Enterprises LLC will form a joint venture to build a high-speed railway linking Las Vegas and Los Angeles, the first Chinese-made bullet-train project in the U.S. 

Construction of the 370-kilometer (230-mile) Southwest Rail Network will begin as soon as next September, according to a statement from Shu Guozeng, an official with the Communist Party’s leading group on financial and economic affairs. The project comes after four years of negotiations and will be supported by $100 million in initial capital. The statement didn’t specify the project’s expected cost or completion date.

The agreement, signed days before President Xi Jinping’s state visit to the U.S., is a milestone in China’s efforts to market its high-speed rail technology in advanced economies. The country has been pushing the technology primarily in emerging markets -- often with a sales pitch from Premier Li Keqiang-- as a means to project political influence. A $567 million contract last October to supply trains for Boston’s subway system was China’s first rail-related deal in the U.S.

The agreement also represents an important victory in China’s high-speed rail rivalry with Japan, as the two countries have competed for train contracts throughout Asia. The parent company of JR Central, Japan’s largest bullet-train maker, had expressed interest in the Los Angeles-Las Vegas line several years ago, and China and Japan are both expected to bid to supply train cars for a proposed high-speed rail line in California’s Central Valley.

"This is the first high-speed railway project where China and the U.S. will have systematic cooperation," Yang Zhongmin, a deputy chief engineer with China Railway Group, said after a news conference in Beijing. “It shows the advancement of China-made high-speed railways."

The Los Angeles-Las Vegas project will create new technology, manufacturing and construction jobs in the region, Shu’s statement said.

Through July, China had built more than 17,000 kilometers (10,565 miles) of domestic high-speed rail lines, according to the official Xinhua News Agency.

Apart from the railway project, China National Machinery Industry Corp. and General Electric Co. signed a memo of understanding to invest $327 million to develop 60 wind power stations in Kenya, Shu said at the Beijing news conference. 

During Xi’s visit starting next week, China and the U.S. are expected to reach agreements on trade, energy, climate, finance, aviation, defense and infrastructure construction, China Foreign Minister Wang Yi said Wednesday. Xi is due to visit Boeing Co.’s factory in Everett, Washington as China makes a push to build its own passenger planes.

"Economic and trade cooperation will be a major topic for president Xi’s visit to the U.S.," Shu said in Beijing. "China and the U.S. share common interests and have solid foundation for cooperation."