Joint Venture for Rolling Stock Engineering Company in China

 Tokyo, February 22, 2005 – Kawasaki Heavy Industries, Ltd. today announced that it has signed an agreement with CSR Sifang Locomotive and Rolling Stock Co., Ltd., the China South Locomotive and Rolling Stock Industry (Group) Corporation, and Itochu Corporation to form a rolling stock engineering joint venture. The breakdown of ownership in the venture, called Qingdao Sifang Kawasaki Rolling Stock Technology Co., Ltd., is Kawasaki, 39%; CSR Sifang, 39%; CSR, 11%; and Itochu, 11%.

 In China, many railway projects have been planned in order to meet the growing transportation demand due to the country's rapid economic development. Kawasaki is positioning the joint venture to seize new business opportunities.

 Through the venture, Kawasaki expects to sharpen its competitive edge and to increase its orders in the Chinese market by providing engineering expertise. Hiring skilled Chinese engineers to improve its design capabilities is another goal, so that the increasing demand for rail car parts design and Kawasaki's overseas projects can be met. For the longer term, Kawasaki plans to enhance the businesses of the joint venture to include procurement of rail car parts within and outside of China.