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Monday, January 31, 2000, updated at 09:08(GMT+8)
China French Firm Looking to Opportunities in China's Western Development

China's strategy to develop its western frontier has aroused the interest of the French firm of Alstom, which is negotiating with potential Chinese partners in Urumqi, capital of the Xinjiang Uygur Autonomous Region, to develop a manufacturing joint venture.

Pierre Lenfant, president of Alstom China Ltd., last week told the China Daily Business Weekly that his firm was "fully aware" of the Chinese government's intention to accelerate the development of the west, which is rich in energy resources.

Although Alstom's commercial network covers the whole nation, its business is concentrated on the eastern areas, according to the report by the China Daily Business Weekly today. Alstom has invested 120 million US dollars in China and has begun seven joint ventures.

Of the seven Alstom-invested joint ventures, five located in Shanghai, Qingdao in Shandong Province, and Hong Kong, manufacture transport facilities including signaling systems, traction equipment and rolling stock.

Two others, in Suzhou in east China's Jiangsu Province and HongKong, produce power transmission and distribution products such as switching gears.

The joint ventures employ 1,000 Chinese. He said that the production of many materials, such as aluminum alloys, or components, such as air-conditioners for trains, is more expensive in China than in Europe.

China's entry into the World Trade Organization (WTO) will benefit the plan, said Lenfant. As a member of a French business group, he met with President Jiang Zemin last week in Beijing.

As the investment environment improves, Alstom will identify new opportunities and "go fast", he added.

Alstom won the Shanghai Metro Line No. 3 project last year and is expected to supply 28 six-car train sets. Lenfant said Alstom will produce 160 trains in China, with 70 percent of components made in the country. The trains will be 20 percent less expensive than imported trains, Lenfant said.

China has succeeded in increasing the speed of its railway trains to 160 km per hour. And Alstom expects to be part of that acceleration program, Lenfant said. Lenfant described Alstom's strategy in China as bringing the country technology first and then working to reduce costs in manufacturing.

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