Crash casts doubt over Chinese rail exports

The worriess were enough to push share prices in Chinese rail companies down by as much as 16 per cent yesterday.

“I think since 2008 China has experienced what we call a ‘great leap forward’ of railway construction,” said Ren Xianfang, a senior analyst at IHS Global in Beijing. “We’ve long had suspicions that this speed of construction is unsustainable.”

The main problem, Mr Ren said, are that the systems in place imply “there are lots of systemic fault lines with China’s management of the high-speed train network” that has resulted in under-investment in the software infrastructure.

China sacked three senior railway officials a day after Saturday’s crash between two high-speed trains in Shangdong province that killed at least 36 people in the country’s worst rail disaster since 2008.

A spokesman for China South Locomotive, which built both trains in a joint venture with Canada’s Bombardier, said signaling operations were to blame.

“The quality of the trains is fine. Neither had any accidents previously. It’s the signaling system that went wrong,” he said.

China has been working for years to develop a high-speed rail network to rival Japan’s bullet trains and use the technology it has acquired or developed to sell its own trains abroad in an effort to move up the value chain from producing mass market goods to being a high-technology exporter.

Under Beijing’s five-year plan to 2015, the country will invest between 3.6 trillion and 4 trillion yuan (331 billion and 372 billion pounds) in its rail sector.