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World Congress Wants to Ban Chinese Buses, Railcars in Defense Bill

02:40  10 december  2019
02:40  10 december  2019 Source:   online.wsj.com

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China ’s push to gain a bigger foothold in U.S. public transit systems could derail in Congress , which is moving to bar the use of federal funds to buy Chinese buses and railcars . The effort threatens to further fray U.S. trade talks with China , which wants to become a global player in transport and is

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WASHINGTON—Congress is taking aim at China in a must-pass defense-policy bill at the same time that the Trump administration is seeking to negotiate an interim trade pact with Beijing.

House and Senate Republicans and Democrats have reached agreement on language in the National Defense Authorization Act that would bar the use of federal funds to buy Chinese buses and railcars, congressional aides familiar with the matter told The Wall Street Journal, adding that the ban excludes pre-existing contracts.

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The effort threatens to further fray trade talks with China , which wants to become a global player in Advocates say the ban is needed to protect an American industry from subsidized Chinese The U.S. House of Representatives passed its version of an annual defense -policy bill July 12 with language

And Congress has given the administration expansive power to block Chinese investment on national security grounds. Representative Kevin McCarthy, a Republican whose California district is home to a Chinese bus maker, BYD, had opposed a version of the provision that would apply to buses as well

The legislation would affect the U.S. subsidiaries of two Chinese companies. One is China’s state-owned CRRC Corp., which has been making significant inroads into the U.S. market for railcars, estimated at $18 billion annually. The other is BYD Co., a Chinese company that sells electric buses for the U.S. market through unit BYD Motors LLC.

The U.S. electric-bus market is expected to grow from $745 million in 2018 to about $1.95 billion in 2024, according to Prescient & Strategic Intelligence Pvt. Ltd., a market-research and consulting firm.

Marina Popovic, human-resources director and chief legal counsel for CRRC Sifang America Inc., a U.S. subsidiary of CRRC, said it was unfortunate Congress decided to move forward on the ban.

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Taxpayer dollars could fund Chinese buses if the House version of the 2020 National Defense Authorization Act (NDAA) becomes law. Those who support the House version of the bill say the members of Congress most concerned about the Chinese buses are only worried about competition.

NEW YORK, July 25 -- The bipartisan bills of the United States to ban the procurement of Chinese buses and railcars by using federal funds could "hurt Americans" and were "not well thought out," a U.S By assembling the railcars in Chicago, it is creating some 170 new jobs for local residents.

BYD didn’t immediately respond to a request for comment. The companies have previously warned that a ban is unfair and would hurt U.S. workers at their factories in California, Illinois and Massachusetts.

“Under this legislation, U.S. transit agencies and taxpayers will ultimately have to bear the financial burden of modernizing passenger railcar fleets that must be updated and upgraded to ensure security, efficiency and safety of its passengers,” she said.

Rep. John Garamendi, (D., Calif.), chairman of the House Armed Services subcommittee on readiness, hailed the provision prohibiting the use of federal funds to purchase Chinese buses or railcars.

Mr. Garamendi said he is aware American workers at BYD’s plant in his home state might lose their jobs because of this legislation. But he believes the ban on Chinese buses and railcars is necessary for national security and economic reasons.

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The White House wants China to stay out of the U.S. mass transit business, whether it’s buses or passenger rail , backing a provision in a The Senate version of the fiscal 2020 defense authorization bill would bar federal dollars from being used to purchase either passenger railcars or buses from

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“It’s absolutely clear that the Chinese government has a strategic and tactical plan to dominate the rail and transit industry—both rail and bus—and have executed that in Australia and are clearly in the process of executing that in the United States,” Mr. Garamendi said.

The National Defense Authorization Act establishes funding levels and sets policies for the Defense Department and Energy Department’s national-security programs. The bipartisan agreement on the bill language was reached after months of negotiations. The final draft still must be signed by negotiators and pass floor votes in both the House and Senate before it can be signed into law by President Trump.

Lawmakers also are poised to ban the U.S. military from buying Chinese drones as U.S. officials grow worried the Chinese devices may be spying on Americans and putting critical U.S. infrastructure at risk.

That provision is a shot at DJI Technology Co., the world’s largest maker of consumer drones based in China’s tech-concentrated city of Shenzhen.

DJI didn’t immediately respond to a request for comment. In the past, the company has said its drones have security features that prevent data transmission to China and that the Chinese government has never requested access to the data that the company does have.

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China ’s CRRC railcar manufacturer finished its best year in 2018, but Congress may ban billion of U.S. sales over state-sponsored subsidy and national security issues. On July 12, the U.S. House of Representatives voted to pass H.R. 2500, the 2020 National Defense Authorization Act, with a

Bipartisan bill introduced that claims ‘ China poses a clear and present danger to our national security and has already infiltrated our rail and bus Senators have taken the first steps to ban rolling stock manufactured by Chinese companies with state ties as part of the ongoing US- China trade war.

The defense bill also would prohibit the removal until certain conditions are met of Chinese telecom giant Huawei Technologies Co. from an export blacklist kept by the Commerce Department.

Commerce officials put Huawei on an export blacklist in May, citing national security concerns. U.S. officials have warned that Huawei products could be used to spy on or disrupt telecommunications networks, which the telecom giant denies.

Huawei didn’t immediately respond to a request for comment. Huawei has said that its equipment doesn’t pose a security risk and that U.S. efforts against it are misguided.

Commerce Department officials have granted exceptions for some rural telecom carriers and U.S. suppliers to continue working with the company despite the ban. That move that has drawn criticism from lawmakers who pushed the Trump administration to remain tough.

The bill contains a number of other China-related provisions, including one intended to reduce reliance on foreign sources of rare-earth minerals, another that requires reports on Chinese military activities in the Arctic and Chinese foreign direct investment in the Arctic, and another that creates new reporting requirements for national security academic research.

Additional language supports improving Taiwan’s defense capabilities by expanding joint training, foreign military sales, and senior level military-to- military engagements. And the legislation would order the Secretary of Defense to review Chinese military, economic, information, diplomatic, and digital influences in Taiwan.

Write to Lindsay Wise at lindsay.wise@wsj.com and Katy Stech Ferek at katherine.stech@wsj.com

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