Beijing Locomotive Speed (II)

By MU YU

The First Beijing Railway Administration Staff Festival.

Diversification has been the key to the Beijing Railway Administration's sustained success in recent years. Between 1998 and 2002, earnings from its tertiary industry businesses tripled from 5.638 billion to 16.317 billion yuan, realizing a total profit of 3.95 billion yuan. The Administration's 1,710 diversified operation business corporations, each with its own legal representative, employs one fifth of its workforce.

Develop Diversified Operations to Increase Business

The Beijing Railway Administration has demonstrated beyond doubt the benefits of diversified operations. Among the Chinese Railway Ministry's 14 administrations, the Beijing administration earns one-third of the business revenue and one-fourth of the profits generated by the whole ministry.

The Administration's expansion into diversified operations dates from 1998, when it experienced a sharp drop in transportation volume. Many countries have experienced a cycle of prosperity, decline and recovery in their railway industry, and diversification has proved an effective measure for recovery. One is Japan Rail which, after having losses in 1987, climbed back into the black by developing multiple tertiary businesses, its current scale of diversified operations is now equal to that of its rail transportation.

Observation of predicaments such as this and the remedies applied in other countries prompted the Beijing Railway Administration to institute reforms to its business management system in 1998. It gained greater control of its national assets and operative and supervisory systems, and clarified the relationship between its investment, management and properties. In order to streamline its industrial structure, the Beijing Railway Administration charged its administration department with the strategy of developing more backbone enterprises in various fields. Over the years, the Beijing Railway Administration has developed 12 pillar industries. They include tourism, freight transportation, catering, construction, real estate, foreign trade, and advertising. From 1999 to 2003, business enterprises under its administration invested 977 million yuan in 78 projects. Of these, 38 enterprises have achieved an output value of more than 100 million yuan; 29 have generated profits of over 10 million yuan; and 19 report the same achievement in both output value and profits.

The Beijing Railway Construction Group signing a contract with a Hong Kong investment company.

Beijing Railway Express is a commodity delivery service that operates on the latest information technology. It has delivery organizations in more than 30 medium-sized and big Chinese cities, and does business in more than 600 cities. Its computerized commodity control system, which combines sales, deliveries and after-sales service, covers the whole country.

The Beijing Railway Travel Service is another Beijing Railway Administration backbone enterprise. It organizes group tours and individual travel arrangements, with a choice of standard and deluxe trains and luxurious coaches. The service organizes trips to large conferences, adding extra soft- or hard-sleeper carriages when necessary. There are well thought out tour itineraries on offer all year round. They include the Silk Road Tour, Northern China Snow Tour, Eastern China Water Town Tour, Southern China Folklore Tour, Spring City Tour, and Famous Mountain and River Tour.

The Beijing Railway Administration Shenzhen Company, constructed in the Shenzhen Development Zone Beijing Railway Industrial Park, is a strong industrial group. Its output value surpassed 500 million yuan in 2002 and is expected to exceed 1 billion yuan by the end of 2004. Many of its products, such as the liquid crystal display and energy saving light, dominate the Zhujiang River Delta market.

The Beijing Railway Hainan Company is one of the biggest tax-payers in the province. It has developed four branches and established 7 joint-venture companies dealing in trade, commerce, tourism, commodity storage, real estate, and car-hire in the cities of Beijing, Tianjin, and Shenzhen, and the provinces of Shanxi, Hebei, Hainan and Guangdong.

Making High Technology Breakthroughs

The Shenzhen Company Shoe Production line.

The Beijing Railway Zhanyi Solar Energy Equipment Co., Ltd. developed the Zhanyi brand solar energy equipment, through patented space technology, and comprehensive utilization of solar and terrestrial heat. Cost effective and environmentally friendly products are now available in northern Chinese provinces and cities and are also exported.

The Beijing Aobo Jinma New Technology Development Company Co., Ltd., whose main shareholder is the Beijing Railway Industrial Development Company, produces lubricating oil and grease of a quality meriting national patent rights. It has also been awarded the Beijing Science Bureau high-technology enterprise certificate.

The Beijing Rail Fulike Packaging Material Co., Ltd., whose main share-holder is the Beijing Railway Shenzhen Company, introduced the aluminum-plating paper technology to make trademarks. It is now a leading enterprise within the Zhujiang River Delta.

The various enterprises under the Beijing Railway Administration constantly seek out more points of potential economic growth and develop new projects in order to hone their competitive market edge. In 2002, they developed 33 new projects at an investment of more than 220 million yuan, expected to bring in an annual income of 304 million yuan after going into operation, and to generate 43.42 million yuan in profits. The investment level of 16 of these projects was more than 1 million yuan, and their projected annual income and profits are 280 million yuan, and 42 million yuan respectively.

Establishing a Modern Enterprise System That Can Compete Globally

The Beijing Railway Administration Taiyuan RailwaySub-administration Jin Temple Convalescent Home, largest in the city.

The Beijing Railway Administration has reformed and re-organized 324 -- 25.2 percent -- of its enterprises, each of which have established a standardized administration system and considered various channels of investment. For example, the government holds just one quarter of shares in the newly re-organized Beijing Railway Administration Xuanhua Station Tielong Smeltery, and the Beijing Rail Shuanglijie Railway Equipment Repairing Company has distributed 60 percent of its shares to its employees.

In 1998, the Beijing Railway Administration set up its International Cooperation Department, and rapidly established economic and trade relations with 32 countries and regions of the world. In 2002, it signed 78 import and export contracts, realizing US $20 million in trade volume. Meanwhile, it has also implemented overseas construction projects, such as the computerized ticketing system for the Vietnamese railway trunk lines. The Taiyuan Railway Construction Group under the Beijing Railway Administration won a 100 million yuan bid for construction of a Botswana highway, and its Foreign Trade Company won the US $3.85 million tender for 312 kilometers of Nigerian railway track relay. To date, enterprises under the Beijing Railway Administration have negotiated over a dozen overseas projects involving Vietnam, Thailand, Mongolia, East Timor, the Democratic People's Republic of Korea and Hong Kong SAR.

In 2002, the Beijing Railway Administration set out to achieve higher quality, larger scale, and more rapid development of its business. In 2003, it expects to realize 18 billion yuan in business revenue, 950 million of which will be profit.