Magang offers new bilateral cooperation model for China, EU

Domestic wheel manufacturer Magang's successful high-speed rail wheel exports to Germany could serve as a new model for China-EU business cooperation, and this cooperation model could be expanded to African markets, experts said on Monday.

Machinists walk at a maintenance depot for high-speeds trains in Chongqing, southwest China, July 18, 2018. (Photo: Xinhua)

The comments were made after a shipment of 160 wheels for high-speed trains manufactured by Magang (Group) Holding Co arrived in Germany, news site thepaper.com reported.

The wheels of Magang, a domestic train wheel manufacturer based in East China's Anhui Province, will be installed on the trains of German railway company Deutsche Bahn after being repackaged in France.

"Magang has also made substantial progress in obtaining provider certification for high-speed wheels in other European markets. We will strive to participate in the competition of the production of new high-speed rail vehicles' wheels and to expand our market share," said Liu Liu, deputy director of the quality supervision department in Magang, thepaper.com reported.

Zhao Junjie, a research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Monday that taking advantage of its French subsidiary, Magang's sales to Germany display a "model" for China-EU cooperation. The deal also shows there is ample scope for bilateral cooperation in advanced manufacturing.

In 2014, Magang spent 13 million euros ($15.22 million) in acquiring Valdunes, a France-based company, whose main businesses include making and selling industrial products for urban transportation. The French company went bankrupt in 2013 and was restructured in 2014, according to its website. 

"As people can see, companies in Europe need capital injections from China," Zhao said, adding that "Magang's lower manufacturing and labor costs, coupled with European countries' advanced manufacturing technology, mean we can make high-quality products at a cheaper price and revitalize European companies as well."

Unstable relations with the US, faced by China and the EU, could enhance the cooperation, he said.

Experts also noted that bilateral cooperation, especially between China and Germany, is a model that could be expanded even in Africa, where these two countries are now competitors.

"Infrastructure products from China, with its advantage in costs, and Germany, with its high quality and advanced technology, are the most competitive in Africa, beating the 'second-class' ones made by the US," Zhao said, adding that the two could achieve win-win results by setting up joint ventures.

"We could do what we are good at, and EU countries could focus on work such as technology supervision and quality checks," Zhao said, adding that in this way, the so-called "intellectual property rights theft" theory could be removed as well.

(Source:Global Times)