Reps. DeFazio, Forbes, Lipinski and More than Fifty Lawmakers Urge Investigation into Chinese Railcar Deal that Threatens National Security
Congressmen Peter DeFazio, Randy Forbes, Dan Lipinski and more than fifty lawmakers today urged Treasury Secretary Jacob Lew and the Committee on Foreign Investment in the United States (CFIUS) to investigate the pending joint venture with the North Carolina-based rail manufacturing company, Vertex Railcar Corporation, and two Chinese corporations, Chinese Railroad Rolling Stock Corporation (CRRSC) and Majestic Legend Holdings.
Chinese Railroad Rolling Stock Corporation (CRRSC) is a state-sponsored entity with access to vast amounts of subsidized funding from the Chinese government, allowing them to unfairly and significantly underbid private competitors in the U.S. Majestic Legend Holdings is associated with Legend Holdings, the parent company of Lenovo Computers and also has close ties to the Chinese government.
America’s rail system covers more than 140,000 miles and carries forty percent of America’s intercity freight, including 111 million tons of hazardous materials. Allowing a foreign, state-backed entity to increase direct investment in our nation’s critical public infrastructure without appropriate review creates significant 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.
The lawmakers wrote,
“This agenda has aggressively asserted Chinese interests into a range of foreign markets such as Australia, Pakistan, the United Kingdom, and others…CRRC in particular is able to access subsidized financing from the Chinese government, which has already enabled the company to underbid private competitors for railcar contracts in Boston and Chicago. In effect, American railcar manufacturers and its associated industries, such as steel, are now competing against the resources of the world’s second largest economy.”
For a full version of the letter, click here.