China's cabinet says rail merger should follow market rules
SHANGHAI, March 26 (Reuters) - The merger of China's top train makers, China CNR Corp Ltd and CSR Corp Ltd , should follow market rules and ensure stable operations, a government report on a cabinet meeting said.
Wednesday's executive meeting of the State Council, or cabinet, discussed progress toward the merger, which would create a train giant able to compete globally with the likes of Siemens and Bombardier, but there were no details about when the companies might link.
The merger "must follow market rules and the principle of the companies acting voluntarily, create favourable conditions for restructuring, ensure the stable operations of the companies and promote improvements in efficiency", a report on the government's main website (gov.cn) quoted the cabinet as saying.
China built the world's longest high-speed train network in less than a decade and has expressed its desire to export its technology. The two state-owned firms however have fiercely competed against each other while trying to sell trains abroad.
A merged CNR-CSR would have combined annual revenue of about 200 billion yuan ($32.2 billion) based on 2013 company data, compared with Siemens' 75.9 billion euros ($83.2 billion) and Bombadier's $18.2 billion.
The train makers were demerged from the government in 2000 to promote competition, and have profited from China's drive to connect the vast country by rail. Their main domestic customer is national operator China Railway Corporation. ($1 = 6.2116 yuan) ($1 = 0.9122 euros) (Reporting by John Ruwitch; Editing by Richard Pullin)
© Thomson Reuters 2016 All rights reserved.