Railway interest group UNIFE has called for a level-playing field and fair conditions between the European and the Chinese rail supply industry. This was after the Chinese state-owned train manufacturer CRRC recently purchased the locomotive division of the German Vossloh Group. UNIFE calls upon the European Commission to take immediate action.

According to the lobbyist, the CRRC purchase confirms China’s strategy to enter and conquer the European rail market. While access to the Chinese market has become increasingly restricted for European rail manufacturers (with an accessibility rate that fell from 63 to 18 per cent in less than eight years), Chinese state-owned rail suppliers have become major competitors in all product segments and on all continents, including Europe, it states.

Chinese strategy

“In this respect, it is worth noting that ‘advanced railway transportation equipment’ is among the ten priority sectors identified by the Chinese government in its ‘Made in China 2025’ strategy. This aims to strengthen the country’s position as a ‘manufacturing superpower’. Rail is also an essential component of China’s geopolitical strategy known as the Belt and Road Initiative”, UNIFE notes.

“For the sake of the 400,000 people employed by the European rail supply industry, it is crucial for the European Union to rise to this challenge and immediately ensure the conditions for open but fair trade relations between the EU and China in the rail sector.”

EU measures

UNIFE is not alone in this concern. In fact, the European Commission has iterated similar statements. Its policy is aimed towards protecting the European railway market. This stems among others from the joint Communication EU-China – A Strategic Outlook.

On 24 July the European Commission issued its ‘Guidance on the participation of third country bidders and goods in the EU procurement market’. Here it reiterates that Chinese economic operators do not have secured access to procurement procedures in the EU and may be excluded from tenders. “UINIFE welcomes this measure. China has until now not signed any binding international agreement with the EU to ensure the reciprocal opening of the procurement markets on both sides. It is of utmost importance for the Commission and the Member States to make sure that contracting authorities are aware of and apply these rules.”

Further action

However, UNIFE now calls on the European Commission to publish before the end of the year a report identifying how to fill existing gaps in EU law to fully address the distortive effects of foreign state ownership and state financing in the internal market.

Regarding the EU-China Investment Agreement, UNIFE also calls on the European Commission to obtain before the end of the year a revised market access offer from China including manufacturing and addressing the barriers to market access faced by the European rail supply industry, in view of an agreement by 2020.

International Procurement Instrument

“Above all, UNIFE calls once more on the Council and the European Parliament to pursue and finalise the discussions on the International Procurement Instrument (IPI), as this mechanism would be instrumental to create a level-playing field and open new market opportunities for European suppliers in China and worldwide. This instrument should also include specific rules for the exclusion of non-European State-owned enterprises from EU procurement”, UNIFE concluded.