Dozens of lawmakers blast Chinese rail car deal

Dozens of lawmakers blast Chinese rail car deal
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Over 50 bipartisan lawmakers are urging federal agencies to investigate a pending Chinese rail car deal that say would threaten national security.

In a letter to the Department of the Treasury, House members blasted a pending joint venture with the North Carolina-based rail manufacturing company Vertex Railcar Corporation, and two Chinese corporations, Chinese Railroad Rolling Stock Corporation and Majestic Legend Holdings.


The lawmakers maintain that because the Chinese Railroad Rolling Stock Corporation is a state-sponsored entity with access to Chinese government subsidies, the company can significantly underbid private competitors for rail car contracts in the U.S. – which they say has already happened in Boston and Chicago.

The Chinese Railroad Rolling Stock Corporation is four times larger than the entire U.S. rail-manufacturing sector, they added.

Meanwhile, Majestic Legend Holdings is associated with Legend Holdings, which is the parent company of Lenovo Computers and has close ties to the Chinese government.

“Given the ownership and history of these companies, the Chinese government is able to utilize the companies to pursue its international trade agenda,” the lawmakers wrote. “American railcar manufacturers and its associated industries, such as steel, are now competing against the resources of the world’s second largest economy.”

Rep. Peter DeFazio (D-Ore.), ranking member on the House Transportation and Infrastructure Committee, helped lead the effort.

The lawmakers also worry that allowing a foreign, state-backed entity to increase direct investment in public infrastructure without appropriate review could raise economic and national security concerns.

“Similar mergers involving state-owned companies have threatened other critical sectors of our economy beyond rail, such as public transit, steel fabrication, energy production, food manufacturing, real estate and more,” they wrote.

Lawmakers asked the federal agency to certify the details of the potential merger in order to protect the domestic rail industry and make sure it’s able to keep supporting the nation’s economy and security.