Bipartisan Rouda provision blocking federal transit dollars to Chinese state sponsored companies passes House in National Defense Authorization Act | Representative Harley Rouda

Bipartisan Rouda provision blocking federal transit dollars to Chinese state sponsored companies passes House in National Defense Authorization Act

July 12, 2019
Press Release

Washington, D.C. – This afternoon, the U.S. House of Representatives voted to pass H.R. 2500, the National Defense Authorization Act (NDAA) for Fiscal  Year 2020. In the bill’s base text was a provision blocking federal transit dollars for procurement of electric rail cars from Chinese State Owned Enterprises (SOEs), and other state-supported companies, originally introduced in the Senate by Senator John Cornyn (R-TX), and the House by Rep. Harley Rouda (D-CA), as part of the Transit Infrastructure Vehicle Security Act (TIVSA).

Said Rouda, “I’m proud to be the lead sponsor of this important piece of legislation with Senator John Cornyn (R-TX), who worked to secure this provision in this year’s Senate NDAA. China’s ‘Made in China 2025’ initiative is an unmistakable effort to harm American manufacturers by subsidizing Chinese rail and bus industries. Chinese companies misrepresent themselves as benevolent actors, but let’s be clear: this is an attack on our economy and national security. I thank my colleagues on both sides of the aisle for coming together to stop the flow of Americans’ taxpayer dollars to Chinese state-owned or state-supported companies.”

Specifically, the provision prohibits financial assistance to be used in awarding a contract or subcontract to an entity for the procurement of rail rolling stock for use in public transportation if the manufacturer is owned, controlled by, or legally or financially related to corporations under certain conditions identified in the bill that designate the corporation to be a state-sponsored or owned enterprise located in adversarial non-market economies like China.

The Chinese government continues to use a range of state subsidies and predatory practices to support its market ascension in certain sectors of the United States’ economy. Two of these sectors, rail manufacturing and bus manufacturing, are included as part of China’s “Made in China 2025” initiative, a plan targeting global dominance in areas that the Chinese government considers most strategic to its global aims.

Chinese state-owned and state-supported enterprises have used subsidized “bargain prices” well-below competitive market price to win contracts throughout the United States. A number of large, metropolitan areas have recently awarded rail rolling stock procurements to a Chinese state-owned enterprise. There are a number of threats these procurements pose including impeding economic competitiveness and overtaking the supply chains that support United States public transportation agencies. Chinese state-owned and state-supported enterprises have increased security vulnerabilities and create new risks for rolling stock procurements.

Joining Rouda in originally introducing the provision in May were Reps. Rick Crawford (R-AR), Scott Perry (R-PA), Kay Granger (R-TX), Tim Ryan (D-OH), Eleanor Holmes Norton (D-DC), Randy Weber (R-TX), and John Garamendi (D-CA). In the Senate, the original bill was led by Senators John Cornyn (R-TX), Tammy Baldwin (D-WI), Mike Crapo (R-ID), and Sherrod Brown (D-OH).

Additionally, Rouda cosponsored eight amendments adopted in the NDAA.