The response from my previous article, “North America Rail Supply and China: Why We Should be Concerned,” has been overwhelming and supportive. Apparently, I ripped a Band-Aid off a topic that’s been unfolding and finally being realized by many over the past decade.
China Railway Rolling Stock Corporation
Caveat: I am a free-market capitalist who believes in the importance of trade to elevate global prosperity. I believe in comparative advantage, and how countries excel at the supply of certain goods and services, to the benefit of others. I now believe that there needs to be market boundaries, for the long-term health of entire industries and the well-being and security of our citizens.
Chinese SOE (state-owned enterprise) CRRC (China Rail Rolling Stock Corp.) “is less innovative than European and Japanese firms, but mercantilist policies help it dominate in China and expand globally. This starves superior firms of revenue, reduces their R&D and slows the pace of global innovation,” according to a report from an independent Washington, D.C.-based think tank.
“CRRC AND BEIJING’S DASH FOR GLOBAL ROLLING STOCK DOMINANCE,” a report prepared by Radarlock, which describes itself as “a research organization that uses data-driven analysis to understand techno-economic dynamics in world affairs,” says that China Railway Rolling Stock Corp. (CRRC) is an arm of the Chinese government with “indelible ties to the Chinese Communist Party,” and whose executives “wear dual hats as corporate and as Party leaders.”
The Railway Supply Institute (RSI) sent a letter to Congress on Sept. 5 urging members of the House and Senate Armed Services Committees to preserve, in Conference, existing language in H.R.2500/S.1790, the National Defense Authorization Act (NDAA) for Fiscal Year 2020, that would prevent federal funds from being used to award a contract or subcontract for the procurement of transit vehicles to priority enterprises owned, controlled, or subsidized by SOEs (State-Owned Enterprises) falling under three specific definitions.
Vertex Railcar Corp., the start-up builder in Wilmington, N.C., is expected to cease operations by the end of this year, according to a published report.
The U.S. Senate and House of Representatives have each passed versions of a U.S. Department of Transportation 2019 appropriations bill that would impose a one-year ban on new procurements of transit railcars or buses from companies owned or subsidized by the Chinese government (namely, CRRC, China Railway Rolling Stock Corp.), if the procurement uses any Federal Transit Administration formula or bus funding, according to an Aug. 1 Eno Center for Transportation report written by Jeff Davis, Senior Fellow and Editor of Eno Transportation Weekly.
The prototype Massachusetts Bay Transportation Authority (MBTA) Orange Line trainset for Boston’s rail transit system built by CRRC (China Railway Rolling Stock Corp.) is undergoing dynamic tests at the CRRC Changchun Railway Vehicles plant in China. MBTA released a short video of testing on Oct. 10.
Germany’s Siemens AG and France’s Alstom SA are discussing a merger to create a European rail transportation manufacturing conglomerate to counter growing competition from China, according to a report in the Sept. 23, 2017 Wall Street Journal. Meanwhile, Siemens continues to engage in talks with Canada’s Bombardier, Inc. about merging their railway businesses.
The quest to concoct a workable rubber-tired replacement for steel-wheel light rail transit (LRT)—on standard steel rails—seems eternal. Several variants of running a “tram on tires,” typically with some configuration of a center guiderail, have been developed.