CRC joins hands with Geely, Tencent on bullet train Wi-Fi services
Zhejiang Geely Holding Group and Tencent Holdings Ltd on Thursday joined hands with State-owned China Railway Corp (CRC) to announce the establishment of China Railway Gecent Technology Co, a company that will provide Wi-Fi services to passengers traveling on China's bullet trains.
The announcement comes after the two leading Chinese private companies on June 7 successfully bid for a 49-percent stake in a subsidiary of CRC.
As part of the State-owned railway operator's mixed-ownership reform mission, a Chinese expert on government policy said that the deal has "symbolic value."
Feng Liguo, deputy director of the China Center for Strategy and Policy Research under the Dongbei University of Finance and Economics, told the Global Times on Thursday that the new firm is an effort that is in line with the spirit of mixed-ownership reform by the government.
"The new entity, without historic baggage and debt burden, will be exploring how to do projects with a rigid budget to accomplish its targets, as private investors supervise. From this point onward, it will be of positive value," Feng said.
But since the cooperation only used private capital to set up the new subsidiary, it will do very little in addressing the efficiency issue at the bulk of CRC's business, which is now facing a loss, noted Feng.
Chinese tech giant Tencent and Zhejiang Geely, the owner of Volvo's car unit, will collaborate with High-Speed Network Technology Company, which was set up in late 2017 by CRC.
Wi-Fi access is already available on China's new-generation Fuxing bullet trains that run on the Shanghai-Beijing line, according to a report by the Xinhua News Agency.
The companies will increase the number of Wi-Fi hotspots throughout the high-speed rail network and develop an online platform that offers ticketing, shopping, tourism and catering services.
More than two-thirds of China's centrally administered State-owned enterprises and their subsidiaries have welcomed outside investors, registered new firms or restructured.
The move is a milestone for CRC, which is under pressure by the State-owned Assets Supervision and Administration Commission (SASAC), China's assets watchdog, to push forward mixed-ownership reform.
SASAC is pushing forward mixed-ownership reform among more than 50 pilot enterprises in seven key sectors, including electricity generation, oil, natural gas, rail transportation, aviation and telecommunications.
China has the world's largest high-speed rail network. The country is expected to have 38,000 kilometers of high-speed rail tracks by 2025.
