Federal Policy Would Keep Chinese Railcars Out of the U.S.

Proposed restrictions on federal spending for transit railcars center on concerns about market competition and national security.
October 9, 2018, 10am PDT | Camille Fink
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Willis Chong

A recent Eno Center for Transportation report examines a proposed policy to restrict the use of federal funds for the purchase of transit vehicles from companies owned or subsidized by the People's Republic of China. The focus of this ban is CRRC Corporation Limited, the largest global supplier of rail transit equipment.

Proponents say the ban is necessary because CRRC is a state-owned enterprise receiving subsidies that can, as a result, underbid its competitors. They also say that CRRC will dominate the transit railcar market and move to take over the domestic freight railcar market down the road.

Opponents argue that the ban would burden American taxpayers and state and local governments, given the higher cost of transit railcars from other manufacturers. In addition, they say that domestic assembly plants for these railcars provide local jobs and encourage regional manufacturing, balancing out negative outcomes.

The report also discusses the national security concerns behind this transit railcar proposal:

Cyber threats—like spyware and malware—are a significant concern for the mass transit industry. The sector is undergoing rapid technological change as rail networks become more connected and automated, outfitted with amenities like mobile ticketing and Wi-Fi, and integrated in social networks.

The report notes that the Department of Homeland Security, as part of the National Defense Authorization Act, will be conducting a study about transit railcars manufactured by Chinese companies and national security threats.

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Published on Wednesday, September 26, 2018 in Eno Center for Transportation
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