As China celebrates 70 years of communist rule, the U.S. Congress is mulling over the National Defense Authorization Act (NDAA) to reauthorize funding and programs within the Department of Defense. Within that national security bulwark is a simple provision aimed at Chinese encroachment.

The Transit Infrastructure Vehicle Security Act (TIVSA), originally introduced as a standalone bill, and now incorporated into the NDAA, prohibits federal taxpayer dollars from being awarded to Chinese manufacturers of transit rail.

Read our Policy Brief on Chinese Infrastructure Ambitions

The TIVSA language in the NDAA does not name China, but applies to the communist regime through its application to state-owned businesses in non-market economies subject to monitoring by the U.S. Trade Representative. China is a particular target of the legislation because of their aggressive expansion and ambition of industry takeover across the world.

Proponents of the TIVSA language point to both economic and national security concerns. China, through its state-owned rail company China Railway Rolling Stock Corporation Ltd (CRRC), has entered and won four public infrastructure bids to provide American urban rail. In Boston, Chicago, Los Angeles, and Philadelphia, CRRC used bids 20 to 50 percent below established western competitors to win contracts. This type of bidding is concerning to many in the U.S. because the state-owned business has the entire artificially managed Chinese economy backing it, virtually eliminating a business-like bottom line. This allows CRRC to displace beneficial economic partners already serving the American market.

Australia is the primary example of CRRC economic aggression. In only nine years, CRRC entered the island nation and undercut the entire domestic industry. Today, CRRC owns and controls the entire Australian freight industry. Fears that this could occur in the U.S. are highly publicized.

When it comes to national security, everything from “spy trains” to fear of rail sabotage make the headlines. Some suggest this is fear mongering, but America’s spy chiefs and top intelligence officials have already warned against Chinese technology and its capability to interfere with and even shut down private energy infrastructure. Beyond this, the highly electronically and digitally integrated state of modern rail provides enormous potential for hidden features ranging from spying to remote manipulation. With Chinese corporations designing, manufacturing, and providing the transit railcars, it would be prohibitively expensive for local governments to vet and ensure every component in every car is safe for riders.

The debate has strong voices on both sides. But leading national security voices are rallying behind TIVSA and pointing to China’s long history of bad action in both national security and economic activity.



Written by Benjamin R. Dierker, Director of Public Policy

You can read more about TIVSA and its potential impacts in our latest policy brief here.

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The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.