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Chinese bullet train disaster clouds future sales

A bullet train passes the wreckage of two other high-speed trains which collided two days earlier, in the town of Shuangyu in the eastern Chinese province of Zhejiang, on July 25, 2011.

Steve Chiotakis: Chinese Premier Wen Jiabao today ordered his cabinet to conduct a public investigation into the bullet train collision that killed dozens of people and injured hundreds more last weekend. China's government has been trying to manage the public outrage there -- all the while worrying about something else: the country's plans to sell high-speed rail to other countries.

From Shanghai, here's Marketplace's Rob Schmitz.


Rob Schmitz: A few weeks ago, a Chinese official boasted that China's bullet trains were far better than Japan's. So superior, he said, that you couldn't even mention the two in the same breath. Since it started running 47 years ago, Japan's Shinkansen bullet train system hasn't had any collision-related deaths. In just a few years of high-speed rail in China, the death count is at 39 and climbing.

Edwin Merner: I think it has a very bad impact on their image, of course a lot of people already know that a lot of their equipment is inferior.

That's Edwin Merner, head of Atlantis Investment Research Corporation. He says the chances now of China exporting bullet trains to other countries is slim to none. He says China rushed its high-speed rail program and thanks to that, it'll now start losing international railway bids to Japan and Korea.

Edwin Merner: Korea has a high-speed railway. That was delayed because the government had found a lot of the construction had not been done properly, so they said, too bad, tear it down, do it again. But I doubt the Chinese would do that.

Merner's not alone in his doubts. In front of the Shanghai train station, Deng Zhiwei says this accident makes him doubt the government's competence.

Deng Zhiwei: Our government has no regard for human life. They just don't care. They need to put everything on the table and stop hiding the reasons for this crash.

An online poll this week echoed Deng's anger. Ninety-four percent of those surveyed said they were 'extremely dissatisfied' with the government's response.

In Shanghai, I'm Rob Schmitz, for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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