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ROLLING STOCK.
124. Apart from the question of extensions of the present railway system, the equipment of existing lines is lamentable. There are too few coaches, too few wagons, too few locomotives and for the most part those that exist are in a very bad state and many are running which ought to be on the scrap-heap. Here again, of course the difficulty is in finance. This is hard enough to arrange even on railways running through well settled districts, but in the districts where civil unrest is rife, it becomes almost impossible. Yet on the restoration of good service depends the profit-earning capacity of the lines and their ability to pay off old debts and improve their equipment.
This difficult situation can only be rectified by credit sales and the Chinese Government are studying ways and means of giving security.
In view of the fact that the Chinese Government has appointed a central purchasing commission at Shanghai, it would appear that the time is ripe for British locomotive manufacturers to send out a representative to examine the situation and make acquaintance with the members of the Commission, and in particular to study the financial methods by which terms may be made reasonably acceptable.
125. The opinion is held among engineers in China that milita- ting against our competition in railway rolling stock are the follow- ing handicaps-
(a) Our locomotive manufacturing firms are smaller than those of our competitors, due largely to the fact that our own big railways manufacture their own locomotives and therefore do not provide a home market.
(b) Owing to distance our delivery dates are frequently less attractive than those of our competitors. This also may be partly caused by the same consideration as under (a).
(c) Far and away more students study railway methods in the United States and elsewhere and are naturally buyers of the products of their teachers. To accentuate this tendency, in offices and waiting-rooms of the Railway Administrations are large numbers of American catalogues, journals and photo- graphs of United States works and achievements, but of our British literature and illustrations there is practically none. We need to undertake propaganda work in both these direc- tions. Surely it should be possible to arrange for the Chinese railway students from their Nanyang University to study our great British railway systems and the works of our locomotives and rolling stock manufacturers. Surely it should be possible to arrange for the necessary literary propaganda.
(d) Our competitors' prices are frequently lower than ours, but those who know our products recognise that they are very
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much better and more durable. This is shown up clearly in repair departments where the frequency of repairs on compet- ing locomotives is much greater than in the case of British ones. Of course the specifications to which the locomotives are built are different for each country of origin, China not having developed any standard specifications of her own.
The com- peting vehicles which we saw made it clear that the British specification was altogether on a higher plane. The very fine locomotives recently delivered from Great Britain to the Can- ton-Kowloon, and Shanghai-Nanking railways should have a great educational effect.
(e) The credit terms offered by our competitors are better than those which the British suppliers are prepared to give. For instance, a Continental manufacturer accepted an order from a Manchurian Railway for four locomotives at £6,303 each, 10 per cent. payable on signing the contract, 30 per cent. within 10 days of despatch from works, 30 per cent, on delivery and 30 per cent. after acceptance. In view of the fact that the Railway in question had met its obligations fairly in the past, this seemed a reasonable risk but was not accept- able to the British makers or to British financial interests.
On the other hand, in some cases our competitors who have given long credits are finding collection exceedingly difficult. For instance the Skoda works sold locomotives to a Man- churian Railway on three years credit but owing to agricul- tural depression are finding great difficulty even in getting payment for erection labour, let alone the principal amounts. Nevertheless they have sold 60 locomotives to Manchuria in three years as a result of credit policy and it is said that they will get paid in the long run. We should certainly go further in this direction than we do.
(f) Our competitors keep resident experts in China; we do
not.
126. In addition to the actual rolling stock, railway development brings in other important openings for contracts. For instance, at Harbin, a scheme for a series of grain elevators is under dis- cussion and there is also a proposal for a rail ferry from Pukow to Nanking. Requirements in connection with railway workshops will be more usefully considered under the heading of industry.
The railways make considerable annual purchases for the general maintenance and renewals. These requirements are nearly always met by public tender awarded on price only. Owing to the low price of Belgian steel, most steel purchases are Belgian, but Great Britain competes well in accessory machinery and replacements.*
* A very full account of Chinese Railways is given in the China Year Book, 1930.
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