A sad farewell? Not so much.
The Washington Metropolitan Area Transit Authority (WMATA) – better known as the D.C. Metro – has cut ties with the China Railway Rolling Stock Corporation (CRRC). It will no longer consider the company to supply Metro’s future projects.
Metro is looking for a company to build its next series of rail cars, and CRRC was expected to be a major competitor for that bid. It had already won contracts to provide rail cars for transit agencies in Los Angeles, Boston, Chicago and Philadelphia. The Washington Post reports the Metro contract could be worth more than $1 billion.
But just before the Congressional holiday recess in 2019, President Trump signed an amended version of the National Defense Authorization Act (NDAA) that prohibits transit agencies from using federal funding to purchase rail cars from certain State-Owned Enterprises (SOEs). This is a big deal because, if you recall, some of China’s SOEs – including CRRC and Build Your Dreams (BYD) – have marching orders from the Chinese government to dominate industries including transit. CRRC is one of the 10 most subsidized companies in China and has close ties to the Chinese Communist Party and the Chinese military.
How are all of these things connected to the Metro, you ask? Well in addition to the questionable practice of awarding federally backed contracts to Chinese SOEs, allowing a manufacturer so controlled by the Chinese government to build the rail cars that zip around underneath out nation’s capital raised serious security concerns. Giving CRRC a Metro contract could potentially give China an easy way to spy on Washington – using rail cars!
The amendment in the NDAA specifically excludes Metro to immediately stop any further overtures from CRRC. Also, according to the legislation, Metro can only purchase from domestic companies or companies based in countries sanctioned by the Tariff and Trade Acts.
AAM is on board with this development This is a positive move for our national security, cybersecurity and infrastructure and a strong stance against Chinese SOEs and the Chinese government.