Joint venture: Zhuzhou Siwei Railway Products Co. Ltd.

At Datenna, our China experts continuously track and conduct detailed investigations into joint ventures established between EU or US companies and Chinese entities located in China. Through a series of articles in our resource library, we highlight striking EU-China and US-China joint venture case studies, analysed based on Datenna's in-depth, unique data on China's techno-economic landscape. This article elaborates on the joint venture Zhuzhou Siwei Railway Products, set up by ABC Rail Products Corporation and CRRC Yangtze.

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The Joint Venture

Zhuzhou Siwei Railway Products Co., Ltd. was established in 2001 as a joint venture between CRRC Yangtze Co. Ltd. and US partner ABC Rail Products Corporation. Its scope of business includes the design, development, manufacture, assembly, and sale of railway equipment in domestic and international markets including the US, Sweden, and Australia. Its main manufacturing products include cast steel bogies — key components in high-speed trains that support and stabilise the rail vehicle while absorbing vibrations and centrifugal forces in high-speed curves. The joint venture is headquartered in Zhuzhou, Hunan Province, an important railway equipment innovation centre. The Chinese party holds a majority share of 60%, with the US partner holding 40%.

The US Entity: ABC Rail Products Corporation

ABC Rail Products Corporation was established in 1987 and is based in Chicago, Illinois. The company deals with the engineering, manufacturing, and marketing of products for the rail industry. Since 1992, it has grown strongly through a series of affiliations and joint ventures worldwide. Prior to the Zhuzhou Siwei Railway Products joint venture, ABC Rail Products established another Sino-American joint venture in China in 1996, mainly involved in cast steel wheels and other cast steel products for rail vehicles. This venture — registered as Datong CRRC Amsted Castings — has a registered capital of USD 34M. At the time of establishment the Chinese partner was the Ministry of Railroads; today, CRRC Datong Electric Locomotives holds 60% of the joint venture.

The Chinese Entity: CRRC Yangtze Co. Ltd.

CRRC Yangtze Co. Ltd. is a Wuhan-based company with a registered capital of USD 204M, engaged in R&D, manufacturing, and servicing of railway freight cars, maintenance of urban rail vehicles, and the sale and export of railway car components and mechanical and electronic products. Before 2015, CRRC Yangtze was named CSR Yangtze Rolling Stock — a large backbone enterprise under China South Locomotive and Rolling Stock (CSR). When CSR merged with China North Locomotive and Rolling Stock Corporation (CNR) in 2015, CRRC was formed and the Chinese shareholder in the joint venture became CRRC Yangtze.

CRRC Yangtze Co. is under full control of CRRC Yangtze Group, a subsidiary of CRRC Corporation. The ultimate controlling party is the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), which implies a risk of Chinese state influence within the venture. With a registered capital of USD 4.1B, CRRC is the largest rolling stock manufacturer in the world, receiving more than RMB 5M in government subsidies each year. According to Datenna's research, CRRC Corporation has invested in a total of 44 subsidiaries, with partnerships and investments spanning every node of the supply chain — from materials and energy sources to semiconductors and energy storage.

Made in China 2025 and China Standards 2035

The railway sector is a key industry in the Made in China 2025 strategy (MiC 2025). CRRC is one of the leading state-owned enterprises advancing the advanced railway transportation industry — a core MiC 2025 sector. Born from the 2015 merger of CSR and CNR, CRRC became a domestic monopoly for locomotives, buses, tracks, and urban rail, reaching more than half of the global rail transit market.

CRRC serves the goal of creating a transportation system that operates globally, designing intelligent high-speed vehicles based on AI, IoT, and smart technologies. Under China Standards 2035, CRRC strives to position itself as a global railway standard setter — not just a manufacturer. To achieve these goals, a global network is essential. Zhuzhou Siwei Railway Products is one example of CRRC's efforts to expand its global presence. CRRC MA Corporation established a rail car manufacturing headquarters in Massachusetts for Boston subway cars; CRRC Sifang America, an Illinois-based subsidiary, supplies railcars to the Chicago Transit Authority; and CRRC was awarded a contract to build cars for the Los Angeles County Metropolitan Transportation Authority. CRRC is also present in Argentina, Brazil, Turkey, South Africa, New Zealand, and Australia, and entered the European market through the acquisition of Beneq and the establishment of subsidiaries such as CRRC ZELC Europe.

CRRC Blacklisted by the US Government

In June 2020, the US Department of Defense added CRRC Corporation to its blacklist of Chinese military companies operating under China's Military-Civil Fusion (MCF) strategy. CRRC joined the MCF Fund in 2017 and has publicly affirmed its readiness to implement the MCF strategy and expand the application of dual-use technology and products. As a result, CRRC and all firms within its arsenal are considered blacklisted by the US government.

Despite this, CRRC has continued to improve its competitive position. In June 2021, the Rail Security Alliance wrote to the US Secretary of Defense raising concerns about CRRC's continued presence in the US market. CRRC appears to manoeuvre around policy barriers by building factories abroad, establishing subsidiaries and joint ventures, and using private firms within its arsenal — circumventing foreign legislation and continuing to expand its global footprint.