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A CRH380B high speed train built by China CNR undergoing final assembly

Chinese firms join LA to Las Vegas high-speed rail project

A Chinese consortium has agreed to help build a high-speed rail link from Las Vegas to Los Angeles.

Led by a unit of China's CRRC, the world's biggest trainmaker by revenue, the group has partnered with US firm XpressWest, which won the green light for the 230-mile high-speed line in 2011.

The deal was announced in a joint statement at a government forum in Beijing, and is the latest in a series of deeper Sino-American business ties to be unveiled before President Xi Jinping visits the US next week.

Despite being worth roughly $5bn (£3.2bn) the deal is likely to involve little financial benefit for the Chinese firms involved, according to Gary Wong, a Hong Kong-based analyst at brokerage Guotai Junan, but is significant for their long-term goals.

"If this opens up the US market for them, opportunities for future expansion will increase. And if (their technology) is used in the US, it will be easier for them to sell to other countries," he said.

Despite many policymakers being split over the need for high-speed rail, and even more unsure about Chinese involvement in such projects, the US is a key target for China's rail industry, which is aggressively pursuing overseas high-speed rail deals in competition with traditional suppliers such as Germany's Siemens and France's Alstom.

CRRC, formed from a state-driven merger of China's two largest trainmakers that was completed in May, plans to grow its share of revenue from work overseas from 12 per cent to 30 per cent within the next five years, CRRC's vice chief economist Cao Gangcai told Reuters on Wednesday before the XpressWest deal was announced.

"We want to attain the position we deserve in the global market...There is no other company on earth that is able to simultaneously research and produce high-speed trains, electric multiple units, subways," he said. "The US market is huge because the fact is that their railway tracks and facilities are ageing and need upgrading."

A statement from XpressWest and the Chinese firms - grouped in a Nevada-based venture called China Railway International USA - said the deal would help accelerate the project without disclosing details of how it would achieve that.

Construction of the line could begin as early as September 2016, but additional regulatory approvals will be required before then.

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