A Guide to Understanding China's Railway Giants

I’d been recently asked by a few colleagues regarding the relationship among China’s railway related companies, so I think it’s useful to explain a bit on the plethora of railway related entities from China.

The railway system of China is really massive and complicated. Previously we had the Ministry of Railway that watched over everything related to railway. In 2013, the Ministry was dissolved and regulatory roles on railway matters was incorporated into the Ministry of Transportation.

At the same time, China Railway (a State Owned Enterprise, or SOE) was set up to take care of railway operations. Its international arm is called China Railway International (CRI), which is charged with the responsibility of “going out” of China’s railway capabilities, especially high speed rail.

China Railway Engineering Corporation (CREC) and China Railway Construction Corporation (CRCC) are both China’s largest railway contractors, ranking 56th and 58th on 2018 Fortune Global 500, each with annual revenue over US$100B. They’re supported by various construction bureaus as well as survey and design institutes. In addition, there’re also China Railway Rolling Stock Corporation (CRRC) that is the rolling stock manufacturer, and China Railway Signal & Communication Corporation (CRSC) that is responsible for the railway signal and communications system.

CREC and CRCC were primarily construction contractors but are now keen to expand their presence in the whole value chain, including financing, design and operations etc. this trend is more evident in their overseas contracting activities where EPC contracting, EPC F, BOT and PPP models are increasingly common.

On the design front, China’s largest railway design institute includes China Railway First Survey and Design Institute Group (FSDI) based in Xi’an, China Railway Eryuan Engineering Group (CREEG) based in Chengdu, China Railway Third Survey and Design Institute Group (TSDI) based in Tianjin, China Railway Siyuan Survey and Design Institute Group (CRFSDI) based in Wuhan, China Railway Fifth Survey and Design Institute Group (T5Y) based in Beijing. Their names may appear bewildering in English, but in Chinese, they simply mean China Railway “Design Institute No. 1 till No. 5”. Among these, TSDI (the Third Institute) was renamed China Railway Design Corporation (CRDC) in 2017 and it’s the only design institute directly under China Railway. “Design Institute No. 2” is under CREC and “Design Institute No. 1, 4 and 5” are under CRCC. There’re also some other smaller railway design institutes supporting CREC and CRCC.

On the construction front, there’re dozens of construction bureaus numbered No. 1 till No. 25, and specialized construction bureaus on specific works such as major bridge, tunnel and electrification etc. “Construction Bureau No. 1-10” are under CREC and “Construction Bureau No. 11-25” under CRCC. These construction bureaus are with varied capabilities and presence in domestic and overseas markets and some are more active in bidding and delivering infrastructure projects in foreign countries than others.

On the financing/investment, and operations front, we’ve also seen big Chinese railway companies setting up new investment platforms for international infrastructure projects, and engaging in railway asset operations and management overseas, such as the Mecca Light Rail in Saudi Arabia. This trend will continue in the coming years as the Chinese SOEs, including the railway giants to further diversify their businesses and expand in the international market. 

Hope the above would help those who wish to understand the complicated railway system of China.