High-speed rail set for rapid growth

China CSR Corp and China CNR Corp, the country's two largest train makers, announced in separate statements issued Monday that they would resolve major issues within the coming week. Many in the market quickly interpreted this as a sign that the two would soon merge into a single entity.

It's hard to dismiss such speculation as unjustified. With top officials - including Premier Li Keqiang - now promoting the overseas sale of Chinese trains and equipment, giants like CSR and CNR will inevitably be drawn closer together as they compete for orders globally.

The high-end manufacturing sector, which includes high-speed rail equipment makers, has already been tipped as one of China's key strategic emerging industries.

According to the 12th Five-Year Plan for the industry issued by the Ministry of Industry and Information Technology, high-end manufacturers are expected to generate sales revenues of over 6 trillion yuan ($978 billion) by 2015.

Against this backdrop, the capital market should also contribute to the industry's development. For example, securities regulators can encourage qualified high-end manufacturers to float and guide equity investment in the sector. They can also provide supports for the merger and restructuring of public companies.