INTERVIEW-IBM opens China rail centre, eyes $731 bln in spending

* Opens IBM's first rail innovation centre

* Sees opportunities in China's $731 bln railway spending

* Eying joint ventures, other cooperative arrangements

By Michael Wei and Kirby Chien

BEIJING, June 11 (Reuters) -IBM's (IBM.N) first rail innovation centre will help it tap into China's 5 trillion yuan ($731 billion) spending in the sector, the firm said on Thursday at the centre's official opening.

The products and services developed at the centre for China also could be applied to markets around the world, said Keith Dierkx, the director of the Global Rail Innovation Centre, which opened in Beijing on Thursday.

"If you can build them for China, everything else is easier," Dierkx told Reuters in an interview.

IBM is working extensively with China's Ministry of Railways on projects dealing with system optimisation, digital video surveillance and asset management programs, he said, adding that IBM hopes the initial advisory role will develop into other commercial opportunities.

"There are potentially joint-venture types of things that could be done," he said.

China's planned investment over the next two years could make up more than half of the world's total railway equipment market, consisting of mostly rolling stock and wagons, according to consultancy McKinsey & Co.

The rising populations of the world's major cities are straining transportation networks and energy resources, forcing state planners to consider building smart and efficient infrastructure to cope with the challenges, Dierkx said.

IBM commissioned a report two years ago on railroads as investors such as Warren Buffett took big stakes in Northern Santa Fe Corp (BNI.N) and Union Pacific Corp (UNP.N), and knew that "something was going to happen" in the industry, Dierkx said.

"Rail obviously has a high level of focus for IBM," he said, without detailing the sector's contribution to IBM's business.

Railroads were not good investments for a long time, but now investors realise railways can ease urban traffic congestion, improve fuel efficiency and reduce carbon emissions, he said.

IBM said in March that Netherlands Railways was using IBM products to match schedules of more than 4,800 trains per day with forecasts of passenger traffic across its system.