At the APEC meeting, China announced the set-up of a USD 40 billion "Silk Road Fund" to provide financing for infrastructure construction, resource exploration, as well as other industrial and financial cooperation projects for neighboring countries. Among the various infrastructure initiatives, the Chinese Government initiated the "One Belt One Road" (OBOR) new silk roadconcept, through the development of a transportation networks connecting China and neighboring countries.

The "One Belt One Road" initiative serves multiple purposes. It enables China to gain access to natural resources, create business opportunities by building better land and maritime transportation networks, thereby bringing new opportunities to the transportation sector as well as its upstream and downstream industries. Industries related to railway construction and transportation equipment manufacturing stand to benefit directly.

Aluminium is extensively used in the railway sector, especially in the manufacture of high speed train carriages. As aluminium extrusion products for the railway transportation sector have stringent technical requirements, only few selected aluminium enterprises have obtained necessary certification to manufacture such products. China Zhongwang, as one of those few enterprises on the list, is poised to benefit from rising opportunities.

In recent years, high-speed trains and urban mass transit systems have been developing at an accelerating pace. Aluminium extrusions and aluminium plates are the key material for manufacturing railway bodies.

For example, high-speed trains running at 200km/hr have stringent requirements as to weight, airtightness and anti-corrosion. Aluminium alloy enjoys an absolute advantage in these regards.

Also notable is the increasing demand for railway transportation from overseas market. The Massachusetts Bay Transportation Authority awarded a contract to China CNR Corporation Limited (601299.SH) to deliver 284 subway cars lately. This was the first time a China rail transportation equipmentcompany won the global bid in the U.S.

Industry Pioneer Establishes its foothold in High-End Market

CNR and CSR (601766.SH), the two largest rail transportation equipment producers in the world, might mergeagain after 15 years. Driven by the OBOR policy, companies which have forged a business relationship with CNR and CSR are poised to take off.

China Zhongwang is one of CNR's business partners. In the first half of 2014, it was selected to provide large aluminium-alloy vehicle parts to Tangche Company, a subsidiary of China CNR, for manufacturing metro cars for Fuzhou Metro.

Mr. Lu Changqing, Executive Director and Vice President of China Zhongwang, said: "with the nation's efforts to promote the transportation sector towards energy saving and light-weight development, coupled with the technology development in aluminium processing, increasing applications of aluminium products across a vast range of downstream sectors such as transportation, machinery and equipment, electricity engineering, market potential of aluminium is huge. Aluminium alloy products are amongst the preferred choices when it comes to environmental protection as it can help improve fuel economy, reduce gas emissions, lower cost and increase efficiency in transportation. Leveraging our experience and advanced technology, China Zhongwang is well-positioned to seize the market opportunities."

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