Germany and China agreed Monday to work together on the building of 500 Chinese trains in a deal signed during German Chancellor Angela Merkel's first full day of a visit to Beijing. The two nations signed a memorandum of understanding to allow technical co-operation on Chinese plans to build 500 locomotives.
The memorandum of understanding was between Germany's Siemens, China's Ministry of Railways and Chinese firm CSR Zhuzhou Electric Locomotive for the project. The memorandum of understanding was announced at a joint press conference at the Great Hall of the People following a meeting there between Merkel and Chinese Premier Wen Jiabao.
No details about the timing or extent of co-operation were given in the agreement.
Siemens president and chief executive officer Klaus Kleinfeld told reporters after the memorandum of understanding was signed that the total value of the project could be worth 1.2 billion euros (1.52 billion dollars).
Kleinfeld made only very brief comments to reporters, however, a German official travelling with Merkel said on the condition of anonymity that the deal could be worth about 300 million euros for Siemens.
China said in September last year it planned to invest around 250 billion dollars in upgrading its passenger rail system by 2015.
Nine new passenger express rail lines were among the investment projects that aim to get passenger trains running at speeds up to 300 kilometres an hour (180 miles an hour).
In July last year, China opened the doors for foreign and private capital to enter its railway industry to help fund its much-awaited network expansion.
At the time, the ministry said it was hoping to attract capital to meet the massive investment needed for a plan to extend the country's railway system from the existing 74,000 kilometres (46,000 miles) to 100,000 kilometres (62,000 miles) by 2020.
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