Recently, China's high-speed rail suffered a "dark loss" in Bulgaria and failed to win a local project, the reason is not that China's high-speed rail technology is not up to par, nor is the asking price too high, but the price is too low.
Normally, as a buyer, we always hope to buy cheap and high-quality goods, and the lower the price is when the quality of the goods is not much different, the better, which is also the meaning of free competition in the market, to prevent a monopoly on the price after a monopoly, and to open as high a price as possible.
China's high-speed rail has been kicked out of the Bulgarian contract bidding because the price is too low! When things go wrong, there must be demons, what are the "demons" that China's high-speed railways have encountered in Bulgaria? Let's take a look at how low our prices are.
The entire Bulgarian high-speed rail project includes 20 electric traction trains and 15 years of maintenance services, with a contract budget of 610 million euros (BGN 1.2 billion).
The Spanish supplier offered 1.22 billion Bulgarian lev, or about 620 million euros, which is not much different from the budget price, and the Chinese high-speed rail offered 607 million Bulgarian lev, or 310 million euros. The price quoted for China's high-speed rail is only half of the project's budget price and that of its Spanish competitors.
There is no doubt that the quotation of China's high-speed rail suppliers is very attractive, and the work can be done at only half the price, plus China's high-speed rail has long been successful and famous, so there is no need to worry about technical problems and cutting corners, but there is an accident at such a competitive price, and the EU has come to "demonize".
It should be noted that China's high-speed rail has not yet entered the bid evaluation process in the process of bidding for the Bulgarian high-speed rail project, and it is directly rejected from the door, not so much that it is the Bulgarian government of Party A that kicks out China's high-speed rail, but the European Union.
Bulgaria is an EU country, and many times it needs to obey the overall situation, even if there is a cheap price to pick up, as long as the EU "says no", Bulgaria does not have much to do. The EU's rejection of China's bid was based on the huge subsidies given by the Chinese government to CRRC to undertake the project, and it was the Chinese government that gave CRRC financial subsidies to give it the confidence to win the bid at a low price.
According to EU estimates, the total amount of subsidies is about 1.75 billion euros.
Seeing this, do you have such questions, the budget amount of the entire Bulgarian high-speed rail project is 610 million euros, and CRRC offers 310 million euros, which is at most 300 million euros of the difference, where can I use the subsidy of 1.75 billion euros?
In fact, 1.75 billion euros refers to the money subsidized to CRRC Group, not for this project in Bulgaria alone, our high-speed rail is mainly operated in China, so it cannot be said that the subsidy is set up specifically for winning the bid for the Bulgarian project at a low price, and the EU cannot calculate how much money is subsidized on this project.
Just as the EU has always wanted to attack China's new energy vehicle industry, it was also implemented through countervailing investigations, and it was found that the government subsidized car companies and imposed punitive tariffs on new energy vehicles and parts exported from China to the EU in order to "maintain free competition".
High-speed rail is a typical product of China's manufacturing industry to develop into the mid-to-high-end field, touching the interests of Western countries, and it is expected that it will be suppressed. The EU always hopes that the projects of member states will be undertaken by member states, which can not only safeguard the interests of EU enterprises but also implement unified high-speed rail standards within the EU, and local protectionism is strong.
Based on this reason, which cannot be said on the surface, it is not difficult to understand that the EU is "demonic" in China's high-speed rail participation in the Bulgarian project.
Local protectionism in Western countries is one aspect, and the change of concept of mainland enterprises after going overseas is another. It is undeniable that if CRRC wins the bid at a price of 310 million euros, it will be trading at a loss. According to media estimates, the guaranteed capital of the Bulgarian project is at least more than 400 million euros, or even more than 500 million euros, and 310 million euros cannot even recover the capital, let alone make money.
High-speed rail is a high-tech product, and it is a representative of the high-end manufacturing industry developed by the mainland with a lot of manpower, material resources and funds.
Undertaking projects at a loss and relying on subsidies to maintain the balance of payments not only gave the EU an excuse not to allow China to participate in the bidding, but also the Chinese people were not satisfied. In fact, there is no direct connection between the two, as mentioned earlier, CRRC is subsidized, and the total income of the project is not less than that obtained by competitors due to the project funds given by Party A and government subsidies.
The main reason for "selling cheaply" may be related to the underlying logic of Chinese doing business.
If you work in Party B, you must have had such an experience, in order to get the first order of a new customer, you would rather lose money, in order to squeeze out competitors into Party A's supplier candidate list first. As long as you go into the later list, it is often not a problem, and the money lost in the first project will be slowly earned back through the follow-up project.
Chinese pay attention to the world, Party A saw that the first order did make Party B lose a lot, plus the relationship has been established for a long time, when there is a new list, the first consideration is the current supplier, and at the same time the price will not be so strict.
This set of business logic may not work overseas, and there are not so many people abroad who are sophisticated, especially in Europe and the United States, which attach great importance to the "spirit of contract".
A list is a one, the contract amount should reflect the true value of the project, don't calculate small accounts on the surface at every turn, calculate big accounts secretly, make a lot of money when you do a business, and don't involve other things in.
In addition, the low-price bidding will also make Party A feel uneasy, and always feel that there is something greasy in it. High-speed rail is related to the safety of the people, and there must be no sloppiness and cutting corners, otherwise something big will happen. There is nothing wrong with technical advantages to reduce costs and thus make a more competitive offer, but too much of a lower price than normal can lead to speculation and self-defeating, as is the case with the Bulgarian high-speed rail project.
We engage in self-research in order to make money, especially to make money from foreigners, there is no need to "sell high-tech products cheaply", foreigners will not think you are good, but feel that Chinese companies are disrupting the market, why do such a thankless thing?