But CRRC may be the most undeserving Chinese company to be hit by the U.S.-China Trade War of 2018. In a little-noticed early-August decision, the Senate and the House both decided to prohibit the use of federal funding to purchase rail cars from China. And while it’s not law yet — the House is not in session — a version of that restriction will almost certainly pass this fall. It means some city governments may have to shop elsewhere and pay more per car. More-expensive subway cars mean fewer subway cars for American cities’ cash-strapped transit authorities. And that means worse traffic — as some commuters opt for driving instead of waiting impatiently for the metro – longer commutes and more global warming. Yay for patriotism.
I’m glad Washington is waking up to the worrying links between many Chinese companies and the ruling Chinese Communist Party, and the national security risks they create for the United States. And I understand the Trump administration’s desire to punish Beijing for unfairly restricting American companies in China through tariffs on Chinese goods and the reduction of Chinese investment in the United States. But hurting American commuters to punish CRRC is just silly.
Not all Chinese, state-run companies are bad for American interests. CRRC is an example of a company that, while firmly under state control, does more good for the United States than harm. Members of Congress interviewed about the bill provided two explanations for it: fairness and fears of espionage.
“All of us are full-throated supporters of competition,” Rep. Mario Diaz-Balart (R-Fla.) told Bloomberg Government. However, he added, the Chinese state is “very aggressive to not compete, but destroy the competition, to in essence have a monopoly.” Encouraging city governments to buy American products is often reasonable. But there are no domestic manufacturers of transit cars. CRRC bid lower than Canadian, South Korean and Japanese firms – in part because of Beijing’s support and in part because CRRC makes a good product. Why use taxpayer money to subsidize a Japanese or Korean firm?
Legislators worry that “smart” freight cars could monitor military supplies and the transfer of hazardous materials, or that WiFi-connected subways could hoover up data. I’m no subway engineer, but it seems like there is an easy workaround – say, have different government restrictions for freight cars than subway cars, or spend some of the tens of millions of dollars saved to ensure that the WiFi is secure from Beijing’s meddling.
The American city most in need of a transit miracle is New York, where subway delays are so common they are unremarkable. In January, New York City’s transport authority voted to spend $1.4 billion to order subway cars from the Japanese company Kawasaki, passing over a bid from a joint venture between a CRRC subsidiary and the Canadian company Bombardier. It’s unclear if CRRC’s bid was more competitive or cheaper — but if national politics did intercede, that would be a shame. Let’s not, in the words of Chicago Mayor Rahm Emanuel (D), let American subways be a “bargaining chip” in international trade. The Chinese are a world leader in subway cars. American brands no longer make them. Let’s get over it, so we can get to work on time.
Bonnie Cao contributed research.