After a few months of negotiations, the US House of Representatives and Senate finally agreed on a final version of next year’s National Defense Authorization Act and it was signed into law by US President Donald Trump on Dec. 21. This means that any indecision over a ban on the use of Chinese-made buses and railcars in US public transportation systems has been settled.
Jointly proposed by Democratic US Representative Harley Rouda and Republican US Senator John Cornyn, the vehicle ban was created to protect US national interests from Chinese state-run enterprises and government-funded competitors using predatory pricing to gain US market share.
The measure secures the operations of US railcar and electric bus manufacturers. As security cameras, Global Positioning Systems and Internet of Things devices manufactured by Chinese companies might continue to share surveillance and strategic information to Beijing, they could be a threat to US national security.
The targets of the vehicle ban — China’s CRRC Corp (中國 中車) and BYD Co (比亞迪) — are two “name cards” representing Beijing’s Go Out policy, which encourages Chinese companies to invest overseas. By taking aim at these two companies, the ban is an extension of the trade and technology dispute between the US and China.
The massive industrial subsidies granted by the Chinese government have been one of the thorniest issues during the trade negotiations. Green vehicles and railway equipment are listed among the 10 key industries in Beijing’s “Made in China 2025” strategy.
Since 2009, Chinese authorities have stimulated the electric vehicle sector with huge government subsidies, creating a bubble leading to a giant leap forward as the Chinese sector has captured half of the global market.
As 5G mobile networks affect the latest mobile communications standards, the advantage that China’s Huawei Technologies Co (華為) has in 5G technology is making Washington worried.
The US is also concerned that as BYD evolves into a global electric vehicle giant, Beijing could dominate traffic and transportation technology.
Rouda and Cornyn’s proposal was backed by interest groups such as the Alliance for American Manufacturing and the Rail Security Alliance, with assistance from the US national security system behind the scenes.
As the final round of congressional negotiations was taking place, retired US Navy admiral Dennis Blair, a former US director of national intelligence and commander of US forces in the Pacific region; retired general James Conway, a former commandant of the US Marine Corps; and retired US Air Force general John Handy, a former director of operations and logistics for the US Transportation Command, jointly published an opinion piece titled “Federal funding for Chinese buses risks our national security” in The Hill on Dec. 9.
They stressed that at a time when the US is working hard to lower its dependence on fossil fuels, if it switches to China’s electric vehicle technology, it would eventually pay a considerable diplomatic and economic price.
CRRC, to fulfill its railcar contracts in Boston, Chicago, Los Angeles and Philadelphia, built factories in Chicago and Springfield, Massachusetts, while BYD’s electric bus plants in the desert city of Lancaster, California, began operations in 2017.
Over the past half year, the two companies have vigorously lobbied Washington players, stressing that they are bringing more job opportunities and increasing the percentage of locally made parts in the US.
Finally, following the maneuvering of US House of Representatives Minority Leader Kevin McCarthy, there is to be a buffer period of two years before the vehicle ban takes effect.
Lancaster is in the electoral district of McCarthy, who spoke at the plants’ opening ceremonies. Lancaster Mayor Rex Parris said that he thought the plants would close immediately, but it now seems that they are to be slowly closed down over the next two years.
Chen Yung-chang is deputy secretary-general of the Taipei Chamber of Commerce.
Translated by Eddy Chang
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