- The Washington Times - Monday, May 25, 2020

China’s communist government is poised to cash in on billions of dollars in federal coronavirus aid designated for U.S. railway systems, warn railroad safety advocates.

Erik Olson, vice president of the Rail Security Alliance, said more than $2.6 billion in contracts has already gone to the Beijing-backed China Railway Rolling Stock Corporation in the past four years.

Because CRRC benefits from financial support from the Chinese Communist Party, the company often can significantly underbid competitors, said Mr. Olson.

“They are moving into this market. They are trying to take it over,” he said. “Any funding is supposed to be kept here in the United States to keep people employed. We fundamentally believe taxpayer dollars need to be staying in the United States.”

The Federal Transit Administration has $22.7 billion to shell out for urban and $2.2 billion for rural rail systems through the CARES Act, the massive coronavirus economic relief package that was approved in March.



The funds are intended to offset operation costs amid decreased ridership and decreased revenue for transit systems due to the coronavirus crisis.

The money can also go toward protective equipment and capital improvements.

Some of that money could go to CRRC for passenger rail cars, though many of the contracts have not yet been awarded.

China cemented its dominant position in railroads by merging two of its largest rail rolling stock corporations to create CRRC, which now controls 83% of the global rail market.

“It immediately became the world’s largest rail company,” said Benjamin Dierker, director of public policy at the Alliance for Innovation and Infrastructure.

A spokesperson from CRRC did not respond to a request for comment for this story.

China’s controls of such a large portion of the U.S. transit sector also gives the communist government the ability to exert significant influence.

“The cost of not addressing this and stopping this from happening is astronomical to our national security — the cost to our taxpayers,” Sen. Martha McSally, Arizona Republican, said during a recent Banking Committee hearing. “To my fellow Americans, to state and local bureaucrats: Wake up! We are being played by the Chinese Communist Party.”

She later told The Washington Times that Chinese state-owned enterprises, such as CRRC, conduct espionage and collect data for the communist government’s intelligence apparatus.

“This threat is particularly high on a metro system that provides service through one of America’s largest cities and puts hundreds of thousands of riders at risk of being tracked by communist China,” Ms. McSally said, referencing Chicago, where METRA is set to receive more than $800 million from the feds and make spending decisions over the summer.

“Additionally, CRRC rail cars are built with Chinese parts and supplies, posing a direct risk to tens of thousands of American manufacturing jobs. Choosing short-term savings over U.S. national security is reckless and METRA needs to wake up to this threat,” Ms. McSally added.

Congress passed the National Defense Authorization in 2019, which bans federal funds from going to China’s CRRC and other state-run economies, but the law doesn’t go into effect for two years.

Mr. Olson said some states such as Illinois, New York, and Massachusetts are considering legislation that also would keep state funds from going toward “non-market economies.”

When money goes to the Chinese state-owned enterprise, it also costs U.S. manufacturing jobs, according to an Oxford Economics study published last year.

For every $1 billion in new contracts awarded to Chinese owned enterprises, the U.S. loses from 3,250 to 5,100 jobs, according to the study.

President Trump has awarded more than half a dozen major cities about $8 billion in the CARES Act funding over the past few weeks, often taking to Twitter to make the announcements.

Last week, Mr. Trump announced Dallas transit would receive $229 million while the Washington Metropolitan Area Transit Authority would get $876 million. San Francisco will be awarded $700 million to use toward its major transportation hubs, the Portland, Oregon, transit system will receive $184 million, and Seattle’s system will get another $166 million.

“I am proud to announce that @NJTransit will receive $1.4B in CARES Act funding to assist in their continued operations and to keep people moving in the NY/NJ area! The LARGEST single Federal transit grant to New Jersey Transit ever. Together, we will prevail!” Mr. Trump also tweeted earlier this month.

He later added, “Chicago’s @CTA has big federal resources heading its way to keep the transit system operational and to keep people moving where they need to go. $817M will aid in the economic recovery — buy Made in the USA!”

He has announced that over $2 billion of the federal funding will go to the New York Metropolitan Transportation Authority.

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