The hearing gets underway this morning.
We noted on Wednesday the news out of Massachusetts about the faulty rail cars produced for the MBTA by the Chinese state-owned enterprise (SOE) CRRC, with which it’s under contract.
Today, that SOE is in the news again, this time in Washington, D.C., where it and ostensibly private Chinese electric bus manufacturer Build Your Dreams (BYD) are being examined at a hearing of the Senate Banking Committee to determine the threat such businesses may pose to American public transportation systems. It’s a follow-up to a House Transportation Committee hearing last May that more broadly looked at the economic impact on the American public transit and freight rail sectors.
It's important to keep in mind that these businesses are essentially arms of the Chinese state. Alliance for American Manufacturing President Scott Paul is invited to testify and in his written testimony has this to say:
For the last two decades, we have seen the destructive impacts of China’s model of state-led capitalism on our domestic manufacturing sector, and the damaging ripple effects on thousands of communities across our nation. …
More recently, we have witnessed China’s state-owned and state-supported rolling stock companies threaten legitimate competition in the markets that serve our public transportation system. Backed by extensive government support, including Made in China 2025, China Railway Rolling Stock Corporation (CRRC) and Build Your Dreams (BYD) are at the forefront of China’s assault. Their penetration into our market has been accelerated by open access to taxpayer-financed railcar and electric bus procurements in major U.S. cities.
In other words: These firms have penetrated our market with not only Beijing’s backing, but also on the backs of American taxpayers.
Other witnesses plan to detail BYD and CRRC’s positions in a constellation of commercial firms and military programs meant to project and harden Chinese power abroad.
Others still will speak about the existing Congressional response to this problem: The Transportation Infrastructure Vehicle Safety Act (TIVSA). In December, Congress passed a compromise version of TIVSA, which bars federal money from being spent on rolling stock – rail cars or buses – produced by state-owned or -controlled companies.
But there’s been no guidance yet from the Trump administration to federal agencies on how to implement TIVSA, and CRRC and its advocates have discussed plans to “indefinitely” extend the two-year implementation delay that was included in the bill.
Paul is urging lawmakers to make sure TIVSA is implemented correctly, and will also recommend other policies meant to shore up the domestic manufacturing base.