German steelmaker ThyssenKrupp is threatening to let China have the Maglev technology that powers the world's fastest train.
The principles of magnetic levitation (Maglev) have been known for seven decades and huge sums have been spent developing the technology.
But to date it has only been used in one commercial train line, at Shanghai's Pudong airport, where it transports people to the city at speeds of up to 430 kph.
ThyssenKrupp developed the Transrapid train with fellow German engineer Siemens. Not surprisingly, they want Germany to also have a Maglev train, to link Munich to its airport -- a long and tedious 40km journey, as I can testify.
But officials have been bickering about the Munich project, particularly its cost -- €1.8bn. The Pudong train cost around $1.2bn and is unlikely to ever recoup the investment.
Tired of waiting for the Munich go-ahead and with no other prospects of Maglev sales on the immediate horizon, ThyssenKrupp is prepared to cut its losses and sell the technology to China, according to Germany's Deutsche Welle. ThyssenKrupp's CEO Olaf Berlien says:
In 18 months, ThyssenKrupp will decide whether the technology will go to China. The Transrapid will then be a German-Chinese project which would mean a technology transfer to China."
That represents a big about-turn on the Germans' original strategy when they zealously guarded the Maglev technology for themselves.
Berlien added that the deal could involve selling the technology to China, founding a joint venture in China or setting up a distribution or marketing partnership with a Chinese firm.
To further inflame passions, ThyssenKrupp argues that the row may tarnish German's high-tech image abroad.
Now, issuing ultimatums is rarely a good negotiating tactic, but clearly ThyssenKrupp is worried that the window of opportunity for its technology is closing. Japan has a variant on the technology based on superconducting magnets, but most worrying for ThyssenKrupp is China's home-grown maglev technology, which uses permanent magnets.
Plans to build a pilot maglev line using China's own permanent magnet technology were announced this summer. The 3km-long line is in the development zone of Dalian.
The Peoples Daily, not surprisingly, claims China's home-grown maglev technology is technically superior and costs 50% less than those of foreign competitors.
But its not ready yet. And faced with the choice of sinking huge sums into developing its own technology or buying a tried-and-tested one -- offered at a suitably attractive price -- the logical choice would be the latter.
But to date, China has shown little interest in using logic to formulate national technology policy - take the debacle over China's much-delayed 3G wireless standard TD-SCDMA, for example.
Shanghai's Maglev has impressed many western visitors to China, not least Henry Blodget, the disgraced former internet analyst, who wrote about his Maglev experience on a recent China fact-finding trip in Slate.
Fear not, Blodget was not out there to pump Chinese internet stocks -- he has been banned from Wall Street for life.
Go here for some good photos of the Shanghai maglev.
