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David Fickling

Alstom and Siemens Show How Not to Deal With China

The French and German companies wanted a train merger to compete with CRRC. But they helped make the Chinese giant what it is today.

If China's such a huge problem for Siemens and Alstom, why did they hand it some of their most precious intellectual property?

If China's such a huge problem for Siemens and Alstom, why did they hand it some of their most precious intellectual property?

Photographer: Qilai Shen/Bloomberg

Once upon a time, Siemens AG and Alstom SA were falling over themselves to talk up the China story.

Alstom’s 2004 contract to supply the country with 60 passenger trains and 180 freight locomotives was celebrated with an announcement touting the 1 billion euro ($1.14 billion) contract value and the French company’s prospects for future growth there. A similar contract from Siemens for 300 kilometers-per-hour trains was announced a year later during a state visit to Germany by China’s then-president Hu Jintao.