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Top three executives fired after high-speed train crash in China
Two high-speed trains collide, 35 people die in crash. Manager of the Shanghai railway, his deputy and the head of the local Communist Party fired. Shares of companies in sector plummet. Nation-wide safety checks on 58 other trains.
Beijing (AsiaNews / Agencies) - China has sacked three senior executives as a result of the collision of two high-speed trains that killed 35 people. The government has decided to stop 58 other high speed trains, and ordered nation-wide safety checks. The incident is the latest in a series of problems on the high-speed network, whose creation was accompanied by a lot of controversy, including accusations of corruption.
On July 23, two carriages from one train fell from a bridge after being derailed near Wenzhou, Zhejiang province. The Minister of Railways says he has sacked the head of the railway in Shanghai, his deputy and the head of the Communist Party. "As leaders it is they who must take ultimate responsibility for the root cause of the accident," said ministry spokesman Wang Yonping.
This incident comes as China is spending billions of dollars to build a network of high-speed lines across the country. Last month the connection between Beijing and Shanghai was opened, which has halved the journey time between the two cities, to under five hours. In spite of assurances given by the Minister of Railways, who has reiterated its confidence in the future of high speed, the incident has impacted negatively on the sector.
The shares of the Chinese manufacturers of railway equipment have fallen, and the shares of two companies that manufactured the trains involved in the collision, the China South Locomotive and Rolling Stock Corp Ltd have lost 12% on the Shanghai Stock Exchange, the lowest in 12 months. Another company in the industry, the China Northern Locomotive has lost 6.5% on the Shanghai Stock Exchange. Instead, airline shares increased by 4%.