High-speed rail is an important national calling card. The 'going global' of high-speed rail is of great significance for promoting China's economic transformation, resolving overcapacity, and advancing the Belt and Road Initiative. High-speed rail is a relatively 'luxurious' infrastructure investment, with enormous funding needs, relatively long construction and cost-recovery cycles, and extremely complex political, economic, and security risks. We need to face these risks and challenges squarely, with the government and enterprises working together and taking proactive measures to respond.

　　On December 21, 2017, the first phase of the first section of the China-Thailand railway cooperation project, a 3.5-kilometer construction project, officially broke ground, becoming China's second high-speed rail line to start construction in Southeast Asia after the Jakarta-Bandung high-speed railway (the China-Thailand railway is a 'quasi-high-speed rail'). At present, high-speed rail, Alipay, shared bicycles, and online shopping are known as China's 'four new great inventions' and have become shining national calling cards. However, even with the guarantee of China's advantages in high-speed rail technology, cost, and operations, as well as the joint promotion by the government and various high-speed rail-related departments, the China-Thailand railway also experienced twists and turns, taking four years to officially start construction. This reflects that China's high-speed rail 'going global' faces certain risks and challenges.

　　The 'going global' of China's high-speed rail is of great significance for the export of China's high-end equipment manufacturing, strengthening economic and trade exchanges with neighboring regions, and promoting connectivity under the Belt and Road Initiative. China still needs to formulate relevant strategies to address challenges. Since China's high-speed rail rapidly 'went global' in 2013, overseas high-speed rail projects have frequently suffered setbacks. For example, high-speed rail projects in Venezuela, Mexico, and the United States were terminated due to domestic economic turmoil, disagreements among political parties, and other reasons, and the Saudi high-speed rail project also caused Chinese enterprises to suffer huge losses due to excessively high costs. As an important part of infrastructure connectivity under the Belt and Road Initiative, the 'going global' of China's high-speed rail faces numerous risks and challenges, mainly including the following aspects:

　　Risk of government default. High-speed rail construction is enormously expensive, and governments of various countries also need to consider issues such as domestic political stability and public opinion. Therefore, once high-speed rail construction faces a political crisis or encounters public opposition, it often faces the risk of delay or even cancellation. The China-Thailand high-speed railway, the Mexico high-speed railway, and the U.S. Western Express high-speed rail project all experienced the risk of government default. In 2013, Premier Li Keqiang of the State Council and then Thai Prime Minister Yingluck signed a 'high-speed rail for rice' agreement, and the China-Thailand high-speed rail project was officially launched. However, in May 2014, a military coup occurred in Thailand, and Yingluck stepped down. After Prayut took over as prime minister, large-scale infrastructure construction projects from the Yingluck government period were suspended, and the China-Thailand high-speed rail project was also temporarily shelved before being restarted later. In 2014, China Railway Construction's Mexico high-speed rail project was declared invalid three days after winning the bid, mainly because the Mexican government of Peña Nieto was opposed by the public on suspicion of corruption, and the public believed that there was also a 'hidden story' behind the high-speed rail project. In addition, the ruling party in Mexico faced increasing pressure from the opposition, which used the high-speed rail project and corruption incidents to pressure the president, and the Peña Nieto government, unable to win support from all sectors, had to cancel the high-speed rail project. China's high-speed rail 'going global' is mostly directed at emerging economies and developing countries. Many of these countries have political chaos, low government governance capacity, and economies that are not fully self-sufficient, so government defaults are common.

　　Economic risk. Since the 2008 financial crisis, the global economic recovery has been slow, showing a low-growth trend. In recent years, the economic situation has not improved significantly, and international crude oil prices and commodity prices have continued to decline, which has dealt a heavy blow to developing countries that rely mainly on commodities and oil as their main economic sources. Many destinations of China's high-speed rail 'going global' are such countries. Once an economic crisis occurs in these countries, it will bring huge losses to Chinese enterprises. Under weak economic conditions, these countries may compress fiscal budgets for infrastructure construction, and their own payment capacity and debt-servicing capacity will further decline, all of which will adversely affect engineering projects. For example, in 2016, the Venezuela high-speed rail project undertaken by China Railway Construction became an unfinished project, and the early investment was lost, mainly due to the impact of Venezuela's domestic economic crisis. Venezuela has a single economic structure, with economic income mainly relying on crude oil exports. In recent years, crude oil prices have continued to decline, foreign exchange income has decreased, domestic inflation has been severe, the economic situation has continued to deteriorate, the Venezuelan government's payment capacity has declined, and the high-speed rail project ultimately came to nothing.

　　Market competition risk. The threshold for high-speed rail construction is relatively high, and the overseas market scale is limited. China's high-speed rail 'going global' also faces competition from high-speed rail powers such as Japan, France, and Germany. In Europe, France and Germany have been deeply engaged for many years, and it is not easy for China's high-speed rail to enter the European market. Even for the Ankara-Istanbul high-speed railway, which China initially contracted, China mainly provided construction and financial support, and most equipment and technology still adopted European standards. In Asia, Japan's Shinkansen technology is mature and has rich operating experience, and it is also welcomed by some countries. By comparison, China's high-speed rail has obvious advantages in cost-effectiveness. At present, competition between China and Japan in the Asian high-speed rail market is relatively fierce. Some countries prefer Japan's Shinkansen for security reasons, but for developing countries with limited levels of economic development, building high-speed rail may bring a heavy fiscal burden, and solving the funding problem for high-speed rail has become an urgent task. For example, Singapore and Malaysia have different views on the Singapore-Malaysia high-speed rail. Singapore tends to choose Japanese enterprises with rich experience in vehicles and signaling systems; Malaysia, because it needs to bear most of the construction costs, prefers Chinese enterprises with lower costs.

　　Host countries fully play the 'high-speed rail balancing act.' Host countries use China-Japan high-speed rail competition to maximize their own interests, which may increase the burden on China's investment in overseas high-speed rail. On the one hand, competition between China and Japan in the Southeast Asian high-speed rail market is intensifying. To seek balance, host countries usually award different high-speed rail projects to different countries while satisfying basic principles. For example, China obtained the railway project from Nong Khai to Map Ta Phut in Thailand, while Japan won the high-speed rail project from Bangkok to Chiang Mai; the Indonesian government is the same. In 2015, China won the Jakarta-Bandung high-speed railway project, which became the first overseas order adopting Chinese high-speed rail technology, standards, and equipment, but the Indonesian government did not abandon Japan's Shinkansen technology, and the two countries still maintain consultations on the high-speed rail plan between Jakarta and Surabaya, Indonesia's second-largest city.

　　High-speed rail is an important national calling card. The 'going global' of high-speed rail is of great significance for promoting China's economic transformation, resolving overcapacity, and advancing the Belt and Road Initiative. In the face of risks and challenges, the government and enterprises still need to actively respond together and take proactive actions in the following areas:

　　Strengthen interactive cooperation between the government and enterprises to jointly reduce economic risks. In recent years, 'high-speed rail diplomacy' at the government level has played an irreplaceable role in promoting the 'going global' of high-speed rail. Almost all large overseas high-speed rail projects invested by China are products of top-level design from the government down, but this may also have drawbacks, namely that high-speed rail enterprises undertaking overseas high-speed rail projects become 'political tasks,' and high-speed rail projects completed regardless of cost may bring heavy financial burdens to enterprises. Therefore, in the process of 'high-speed rail diplomacy,' in addition to top-level design and supporting services, the government should give enterprises more autonomy to make rational project investments. The government and enterprises should cooperate with each other while each fulfilling its own responsibilities, maximizing the prevention of economic risks.

　　The government and relevant financial institutions need to continue to increase policy support for high-speed rail enterprises 'going global.' Driven by the Belt and Road Initiative, Chinese high-speed rail enterprises 'going overseas' are welcoming more opportunities. State-owned commercial banks, policy banks, multilateral investment banks including the Asian Infrastructure Investment Bank, and multilateral funds such as the Silk Road Fund have also provided various financing channels for external infrastructure construction. The government can continue to expand the scope and scale of international production capacity cooperation, further improve fiscal, tax, and financial incentive policies for high-speed rail enterprises to open up overseas markets, enrich bilateral and multilateral cooperation funds, and provide more abundant financing channels for enterprises to participate in overseas high-speed rail projects.

　　High-speed rail enterprises need to further improve risk control awareness and levels in the process of 'going global.' High-speed rail is a relatively 'luxurious' infrastructure construction with enormous funding needs, relatively long construction and cost-recovery cycles, and more complex political, economic, and security risks. Chinese high-speed rail enterprises have rich experience in overseas engineering contracting. However, in the face of the new situation and new landscape of global economic development, high-speed rail enterprises still need to fully understand and adapt to the new normal of industry development and improve risk control capabilities. First, fully investigate the risks faced by the project, fully consider economic factors such as the world economic development situation and the host country's economic conditions, government fiscal revenue and expenditure, and national development strategies, prevent risks brought by economic deterioration, and comprehensively and meticulously understand project risks by establishing risk management departments or hiring professional consulting companies; second, formulate management regulations and mechanisms to address specific risks. For example, for security risks such as poor public order in the host country, security monitoring can be strengthened, response plans formulated, and security drills intensified.