Illustration: Peter C. Espina /GT

Earlier this month, XpressWest , a private US interstate high-speed passenger railroad company, decided to terminate its joint venture activities with China Railway International (CRI) regarding a high-speed passenger rail link between Las Vegas and Los Angeles. The company said in a statement that the project's "biggest challenge continues to be the federal government's requirement that high-speed trains must be manufactured in the US" and that CRI faces "challenges in obtaining required authority to proceed with required development activities." According to Xinhua News Agency, China Railway opposed XpressWest's decision and has taken legal measures to contest it. This incident shows that the common problem of insufficient risk assessment persists when China's high-speed rail builders "go out."The biggest risk in assessing high-speed railway projects is a lack of comprehensive understanding of the target country. In the XpressWest case, the company's Chinese counterparts might have been overly optimistic about the degree to which US residents welcome high-speed railways.The total length of railroads in the US exceeds 400,000 kilometers, accounting for more than 30 percent of the world's total length and ranking first globally. Despite this fact, the question of whether to build high-speed railways in the US has remained a subject of debate, and to a certain degree, those who are against building such railways appear to represent the majority of Americans.The reason behind this is that the number of personal cars in the US exceeds 250 million, suggesting that almost every American citizen owns one car. Meanwhile, over 90 percent of the country's well-connected expressways are free of charge, giving highways an economic advantage that makes them the first choice for travel. Furthermore, the distribution of cities within the US is less dense than it is in China, so transport between US cities largely depends on vehicles for short distances or on the country's sophisticated air transport network for long distances. Railroads in the US are positioned more for the transportation of goods, and most lines are used for both passenger and cargo traffic. But high-speed railroads are usually constructed only for passengers, prompting doubts from the public about their utilization.The second risk in assessing projects is defining the financial risk. Past experiences, such as the cancellation of a high-speed rail contract in Mexico, have shown that some high-speed railway projects haven't been able to register joint ventures in the target countries in time. There are obviously some advantages to establishing joint ventures in target countries, because by doing so the foreign counterparts take their joint venture activities more seriously and are likely to face less pressure from local governments and the public. In previous years, some Chinese railway project managers imprudently and irresponsibly made unrealistic promises to their foreign counterparts like "completion of construction in three years and inauguration in five years" without conducting a thorough assessment of the project's requirements.These risk assessment problems ultimately point to the fact that China's high-speed railway industry is in urgent need of professionals who are internationally minded. There are two groups of professionals that are most greatly needed. The first group is overseas project managers who have relevant expertise in the high-speed railway industry and who are also proficient in foreign languages; the other group is professionals who specialize in international business negotiation and who are familiar with international civil and commercial law, especially law on contracts and claims. China could fill the gap before its domestic education and training capabilities reach a satisfactory level by establishing joint ventures with its international counterparts, letting them shoulder the corresponding responsibility to make up for the lack of such expertise. But in the long run, China must rely on itself.Looking back over China's years of "going out" experience in the high-speed rail industry, the China-Thailand railway project set to start construction soon can serve as a case in point. Despite some setbacks, the project has managed to move forward because these above problems have been largely settled.Looking ahead, China's core competitiveness in high-speed railway construction allows us to keep believing in its ability to "go out." China is the only country in the world that has the systemic technology to conduct R&D and manufacture trains that are high quality, faster and more cost-effective while also constructing railways and being able to export the whole package overseas.Although developed countries like Germany and Japan have certain advantages in R&D, the value of technology can only come to fruition when it is applied in the field. As a representative of China's high-end equipment manufacturing industry, the unique advantages of China's high-speed rail industry lie in its capability to integrate and improve advanced technology from developed countries like Germany and Japan and in its experienced, efficient and coordinated construction teams that also specialize in cost control.The author is an academician at the Chinese Academy of Engineering. bizopinion@globaltimes.com.cn