Op-Ed: Looking ahead after Congress’ funding ban on Chinese railcars

Last January, the Washington Post published an article titled “Could Chinese Metro Cars Spy on Us? Many experts say yes”.  It put a national spotlight onto the fact that a Chinese state-owned enterprise called China Railway Rolling Stock Corporation (CRRC) had won more than $2 billion worth of contracts to assemble passenger railcars for some of America’s largest cities, raising both national and economic security concerns in the process.

Less than a year later, Congress passed legislation that will ban any future federal funding from being used to purchase transit or passenger rolling stock from a company that is owned, subsidized, or otherwise directed by the Chinese government. It also institutes robust cybersecurity requirements for these procurements, regardless of the entity involved.

In today’s polarized environment, getting any legislation passed with strong bipartisan support — let alone in such a short time span — is no easy task. Yet, just months after a bipartisan coalition in Congress introduced the Transit Infrastructure Vehicle Security Act (TIVSA), more than 100 members in the House and Senate had signed on in support.

The level of support behind this bill was not surprising. There is ample evidence suggesting that not only are there security risks associated with the use of technology developed by a Chinese state-owned enterprise, but also potentially grave implications for the future of domestic railcar manufacturing and the tens of thousands of U.S. jobs it represents.

A 2019 report from Oxford Economics estimated that for every job CRRC creates in the U.S., somewhere between three and five jobs are eliminated elsewhere in the country. The reason? Unlike many other transit railcar builders that manufacture and source the vast majority of their components domestically, CRRC largely outsources that manufacturing to China, leaving only final assembly here.

While TIVSA includes a two-year delay in implementation for transit agencies outside Washington, D.C., it does prohibit federal taxpayer dollars from being used to buy railcars from a Chinese Government-subsidized company, thereby helping to restore a level playing field for the numerous U.S.-based manufacturers to compete.

What comes next for America’s transit agencies? The bill will require improvements to every transit agency’s rolling stock procurement policies and cybersecurity standards. It will be important for all transit agencies throughout the U.S. to consider the message Congress has sent in approving this legislation, and I would echo the calls senior lawmakers have already made for the Federal Transit Administration to quickly release information on this congressional mandate so that transit agencies understand the importance of complying with this bill’s provisions when making any future procurement decisions. 

Needless to say, our industry’s future and security may depend on it.

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Mike O’Malley is president of the Railway Supply Institute (RSI), a trade association representing over 200 companies in the railway supply industry.