Experts said that the merger will help the trainmakers become more competitive against rivals including France-based Alstom SA, Canada-based Bombardier Inc and Germany-based Siemens AG.

Zhang Cheng, an analyst with Changjiang Securities Co Ltd, said that the merger will promote the localization of the core components of railway equipment and avoid the wasted expense of duplicate research and development.

The merger will also reduce competition in the domestic and foreign markets, where the two companies have been cutting their bid prices to gain an edge.

CNR is China's largest railway equipment manufacturer with 2013 revenue of 96.8 billion yuan, while CSR is ranked the second-largest with revenue of 96.5 billion yuan.

Premier Li Keqiang mentioned in the annual Government Work Report last week that China will implement a "Made in China 2025 strategy".

Although he did not elaborate, experts said that his comments indicated the government's resolve to boost the nation's manufacturing industry. The new CRRC is expected to play a key role in that strategy.

Experts believe that there will be no major issue with the domestic antitrust authority, but approval will still be required in the European Union and United States.