Summary：Li Keqiang's comments that China was interested in helping build high-speed lines in Thailand sends shares up,...

(Beijing) – Stockholders sure like the idea of Thai rice for Chinese rails.

Stocks related to China's railroad industry surged on October 14 after Premier Li Keqiang pledged Beijing's cooperation in high-speed railroad projects in Thailand.

Li's comments, made on a visit to the Thai capital Bangkok, raised the stock market's hopes that Chinese railroad companies will get more deals in the Southeast Asian country.

While attending an exhibition dedicated to China's relatively new high-speed railroads in Bangkok with Thai Prime Minister Yingluck Shinawatra, Li also said he hoped the two countries could cooperate on projects that used equipment exported from China.

Some 31 companies engaged in building infrastructure saw their stock prices jump by an average 6.04 percent on the Shanghai bourse. Ten firms related to high-speed railroads, including major train manufacturer China South Locomotive and Rolling Stock Corp. (CSR), China CNR Corp. and Jinxi Axle Co., had their share price surge to the 10 percent daily limit.

China and Thailand signed a memorandum of understanding on October 11 regarding cooperation in railroad development. China said it would seek to participate in a high-speed railroad project linking northeastern Thai city of Nong Khai and Phachi, a district of Ayutthaya Province, which just north of Bangkok.

Some of Thailand's payments for the projects would be in the form of agricultural products, including rice.

CSR said it is preparing to set up a center with research institutions in Thailand to engage in research and development, testing and certification, and talent training.

The partnership with Thailand would provide a boost for China's high-speed railway industry, which has suffered a slowdown since 2011 when a deadly train crash triggered an industry-wide inspection and the exposure of a network of graft.

That corruption has led to a slew of trials and one ended in July with a lengthy jail term for the former railroad minister, Liu Zhijun.

So far, Southeast Asia is the main market for China's rail equipment exports, but deals have also been signed with partners in Central Asia, South America, Australia and Africa. Exports include locomotives, cargo and passenger cars and other parts. However, none of China's train makers has exported a whole high-speed train to another country.

A CSR source told China Business News that Chinese companies have become major suppliers to the railroad market in Thailand, which is planning several high-speed lines across the country.

In June and July, CSR won bids for two locomotive contracts in Thailand. CNR has exported subway equipment to the country.

However, analysts say Chinese train makers are simply equipment providers and generate little profit from after-sales services and maintenance. Both CSR and CNR have made efforts to improve their after-sales service in overseas markets by setting up subsidiaries that perform maintenance and repair services.

In September, CNR signed a contract to sell eight diesel locomotives to New Zealand KiwiRail Holdings Ltd. The companies also signed a maintenance contract for one of the locomotives, the first such product and services contract clinched by a Chinese train maker with a customer in a developed country.

A source from CNR said China still relies on imports for many major parts in high-speed trains, such as wheels, bearings and electricity systems. This was due to limited research capacity.

However, the source said Chinese companies outperformed many international counterparts in building lines.