Lawmakers on Thursday called on Americans to “wake up” to what they say are dangers posed by Chinese-owned and manufactured rail cars and buses, citing cyber and national security concerns.
The latest pushback comes after agreements between two Chinese groups and multiple U.S. cities to build public transit systems, with lawmakers on both sides of the aisle warning that such deals could compromise the security of transportation system data.
“The potential for an adversarial state actor to monitor the movements of American citizens, hack personal or government-issued devices, and collect intelligence on our military is a major security concern,” Sen. John CornynJohn CornynAbbott bows to Trump pressure on Texas election audit Senate panel advances antitrust bill that eyes Google, Facebook Democrats up ante in risky debt ceiling fight MORE (R-Texas) said at a Senate Banking Committee hearing on threats posed by state-owned and operated transportation services.
“Allowing American trains and buses to become Trojan horses for these technologies on American soil is unacceptable,” Cornyn added.
Cornyn was one of the sponsors of a bill signed into law in December as part of the 2020 National Defense Authorization Act that bans the use of federal funds to purchase passenger rail cars or buses from state-owned or controlled groups.
However, a clause was included for the law to not take effect for two years, a provision Cornyn opposed.
“Unfortunately, special interests were able to demand a two-year enforcement delay of some of this legislation’s critical components,” Cornyn testified Thursday. “I am here today to ask for your help in ensuring this delay does not turn into a window the Chinese Communist Party and its state-controlled companies can further exploit.”
Two prominent Chinese transportation manufacturers that the law was aimed at are railcar manufacturer China Railway Rolling Stock Corporation (CRRC) and bus and electric battery manufacturer Build Your Dreams (BYD).
CRRC, which is the largest manufacturer of metro rail cars in the world, is in the process of building rail cars for Los Angeles, Chicago, Boston and Philadelphia. In 2018, New York’s Metropolitan Transit Authority announced that CRRC had won a contest to build new railcars, with CRRC pledging $50 million of its own funds to win the deal.
One exception to the delay on the new law going into effect was the Washington Metropolitan Area Transit Authority (WMATA), which was required to implement the ban once the bill was signed into law. Prior to the law, CRRC was preparing to bid on a contract to build railcars for the D.C. area.
Sen. Sherrod BrownSherrod Campbell BrownSenate poised to battle over Biden's pick of big bank critic Biden taps big bank skeptic to for top regulatory post Schumer announces Senate-House deal on tax 'framework' for .5T package MORE (Ohio), the top Democrat on the Senate Banking Committee, pointed to Chinese government subsidies as enabling CRRC to win the contracts through lowballing bids. In Chicago, Brown noted CRRC beat out the next lowest bidder to build railcars by more than $200 million.
“CRRC and BYD are two in a long line of examples of how China cheats its way ... into being a global leader into industry after industry,” Brown said, adding that “Congress still needs to fully assess the risk associated with data of our transportation system being exposed to foreign actors.”
Experts have warned that the railcars and buses are vulnerable to hacking and could be controlled remotely.
“Putting railcars manufactured by a Chinese state-owned firm underneath the Pentagon in Washington, D.C., or near sensitive locations in New York City or anywhere else in America is a horrible idea,” Scott Paul, the president of the Alliance for American Manufacturing, testified to the Senate committee on Thursday.
Concerns around Chinese transit manufacturers' operations in the U.S. stem from a Chinese intelligence law that requires companies to participate in state intelligence work and hand over data and information if requested. Telecom giant Huawei and social media app TikTok have come under similar negative scrutiny as a result.
Marina Popovic, the chief legal counsel and director of human resources at CRRC Sifang America, told The Hill last year that CRRC was using some American-made components in building the railcars, and that once they were delivered to transit authorities, the railcars would be out of the company’s control.
“CRRC is very dedicated and very supportive of the fact that there will be security measures, safety measures and transit agencies will want to be satisfied before they accept a car,” Popovic said.
Committee member Sen. Martha McSallyMartha Elizabeth McSallyFive takeaways from Arizona's audit results The Hill's Morning Report - Presented by AT&T - Senate passes infrastructure bill, budget resolution; Cuomo resigns Schumer, Tim Scott lead as Senate fundraising pace heats up MORE (R-Ariz.) pushed back hard against the two companies on Thursday, and said the testimony of experts and members of Congress should be “required listening” for transit officials.
“I am making a plea to my fellow Americans to state and local bureaucrats, wake up, we are being played by the Chinese Communist Party,” McSally said.