Backing Brazil beyond the Olympics

Updated: 2016-08-05 08:11

By Zhong Nan and Liu Mingtai(China Daily Europe)

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Chinese infrastructure majors will continue to strengthen South American country long after 2016 Rio Games

Just as global companies such as Caterpillar Inc, Alstom Group and Siemens AG have injected billions of dollars into China's infrastructure over the past three decades, Chinese enterprises are committing to Brazil's development.

As the South American nation attempts to ride a wave of Olympics-related economic activity toward long-term growth, with a stress on world-class infrastructure, the local market share of Chinese companies is expected to increase.

Backing Brazil beyond the Olympics

CRRC Changchun Railway Vehicles Co, for example, has provided subway trains for Rio de Janeiro's rail systems. If the trains win praise during the Games, from Aug 5 to 21, the company can expect to receive more orders.

Brazil received a $12 billion loan from the World Bank to help finance infrastructure projects in the run-up to the Olympics. Part of preparations involved orders for 15 subway trains with 90 cars.

CRRC Changchun, a subsidiary of China Railway Rolling Stock Corp, won the business and supplied the rail cars well in advance, so early in fact that some were used to ferry football fans between Rio de Janeiro's central station and the Maracana Stadium during the 2014 FIFA World Cup.

Wang Huaifeng, chief representative for CRRC Changchun's rail project in Rio de Janeiro, says the new subway trains will play an essential role during the Games this month. They will be used on the city's Line 4, a key infrastructure project connecting the Olympic Village with the Copacabana center.

A subway train typically comprises six cars that can carry a combined 2,240 people, running at a maximum speed of 100 kilometers per hour. CRRC Changchun's trains in Brazil are equipped with speed limiters, which automatically sound an alert and slow the train if it goes too fast.

The subway trains are made of A-type stainless steel and have a far more compressive load than that of an ordinary train, Wang says. This means they can ensure passenger safety in the case of any head-on collision with an 80-metric-ton truck running at a speed of 36 km/h.

Feng Hao, a rail transportation researcher at the National Development and Reform Commission, says that compared with car-dominated urban traffic systems, urban light rail services generate lower emissions and are cheaper.

"They're ideal for mass transportation systems, especially in major cities or tourism destinations," Feng adds.

CRRC Changchun has a technical team of 60 people in Rio de Janeiro to oversee operations ahead of the Games. They will stay there until the end of August. It is the first time a Chinese train maker has provided transportation services outside China for Olympic Games.

Like CRRC Changchun, construction machinery makers such as Xuzhou Construction Machine Group and Sany Group have been buoyed by orders from Brazil, which has a vast infrastructure market. And again, it's thanks to the Olympics.

Xuzhou Construction announced in July that it will add $99.7 million to its branch in Brazil to boost production capability and improve its asset structure. It will also lower the risk caused by currency fluctuations, add more local dealerships and distribution warehouses, and boost its spare parts sales and leasing businesses in the nation.

Cui Jisheng, general manager of XCMG (Brazil) Co Ltd, says the 2014 World Cup and the 2016 Olympics have provided huge opportunities for construction equipment makers, and that Chinese companies "are set to become some of the largest beneficiaries of the transformation in Brazil".

Brazil became the largest importer of Chinese truck cranes in 2013, while Chinese crane enterprises had a 91 percent market share in Brazil last year, according to data from the China Council for the Promotion of International Trade.

"Xuzhou Construction Machine Group will set up direct-service platforms (in Brazil) for its customers," Cui says. "Such platforms will send customers the latest product information, while specialists in different places will offer advice on saving fuel, maintenance and component replacement over the next three years."

He adds that Brazil's demand for infrastructure will continue to attract Chinese companies long after the Games are finished.

The Brazilian economy went into recession last year, but the country recently witnessed a surge in mergers and acquisitions by overseas companies. Some 285 big-ticket deals were sealed, and foreign direct investment reached $70 billion, partly thanks to Brazil's fast-growing, sport-driven economy.

Contact the writers through zhongnan@chinadaily.com.cn

(China Daily European Weekly 08/05/2016 page30)

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