House Acts to Block Federal Funding for Rail Cars Built by Chinese State-Owned Companies

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

A big step in the right direction.

The House of Representatives on Friday passed the annual spending bill for the Defense Department, and the legislation included language to block federal transit dollars from being spent on electric rail cars made by Chinese state-owned companies.

The provision included in the National Defense Authorization Act (NDAA) passed by the House prohibits federal tax dollars from being used to award a contract or subcontract for the procurement of rail cars to be used in public transportation by state-owned or controlled companies from non-market economies like China.  

Although the NDAA passed on party lines, this specific legislation enjoyed bipartisan support, as it was originally sponsored by Reps. Harley Rouda (D-Calif.), Rick Crawford (R-Ark.), Scott Perry (R-Pa.), Kay Granger (R-Texas), Tim Ryan (D-Ohio), Eleanor Holmes Norton (D-D.C.), Randy Weber (R-Texas) and John Garamendi (D-Calif.).

The NDAA now heads to conference with the Senate, which previously passed its version of the defense authorization bill that included a similar provision that applied to both rail and buses. Sens. John Cornyn (R-Texas), Tammy Baldwin (D-Wis.), Mike Crapo (R-Idaho) and Sherrod Brown (D-Ohio) served as the original sponsors of the Transit Infrastructure Vehicle Security Act in that chamber.

Here at the Alliance for American Manufacturing, we encourage lawmakers to put forth a final NDAA conference report that includes the Senate version of this provision, as it applies to both types of public transit.

AAM President Scott Paul recently testified before the House Transportation and Infrastructure Committee about the risks of public transit made by Chinese state-owned enterprises (SOEs), and we’ve previously outlined some of the dangers.

Here’s what is happening: China’s state-owned or controlled companies severely underbid on government contracts to build local transit systems. They can do this because the goal isn’t to make money, as is the case with a business operating in an open market; China is aiming to dominate the global transit industry as part of its “Made in China 2025” plan. As such, it is heavily subsidizing these companies to gain an unfair advantage and nab contracts — and the plan is working.

Chinese SOEs like the China Railway Rolling Stock Corporation (CRRC) have won transit contracts in cities like Boston, Chicago and Philadelphia. CRRC beat its closest competitor, Canadian company Bombardier, by $34 million for the contract in Philly; its bid was $47.2 million lower than the one put forth by South Korea’s Hyundai Rotem, which already had a manufacturing presence in the city.

China is rigging the system — and as Scott Paul outlined to Congress, it is putting 90,000 jobs in the transportation supply chain at risk. A recent Oxford Economics report even estimated every $1 billion given to Chinese SOEs to build rail cars costs up to 5,100 U.S. jobs.

Meanwhile, there are major security concerns. For example, experts warn that China’s government already is using facial recognition technology to track its own people, and it is likely Chinese officials would do the same to track Americans (especially in cities like Washington, D.C., where CRRC is in the running for a contract). 

Now it’s up to YOU to get this legislation to the finish lineTell your lawmakers to back efforts to prohibit federal tax dollars from being given to Chinese state-owned or controlled companies to build rail cars or buses.


Reposted from AAM

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