Why would Chicago consider giving stimulus dollars to China’s rail industry?

The federal government has allocated hundreds of billions of dollars to help ameliorate the disastrous effects the novel coronavirus has had on our nation’s economy. We have taken out a huge mortgage on the United States’s financial future. So why, let us ask, would we not protect against spending money meant for U.S. cities and their infrastructure on a Chinese state-owned enterprise for rail transit cars?

The Chicago-area transit authority, Metra, could get up to $800 million in stimulus dollars promised to Chicago, the city’s mayor has said. Given Metra’s decline in ridership and revenue because of COVID-19, when and if that stimulus money arrives we would hope that the Metra’s leaders would dedicate our hard-earned tax money toward keeping the operation running and not consider using it to buy rolling stock from a company owned by the Chinese Communist Party (CCP) — even though that might be permitted under federal guidelines. 

The Chinese Rolling Stock Railway Corporation, or CRRC, has won contracts to build fleets for Chicago and several other major U.S. cities, raising concerns about the national security implications. This is the same company that competes unfairly with U.S. and Western corporations that can’t rely on heavy state subsidies to underbid rivals.  

This is the same company that reportedly relies on mica mined by small children in southern Madagascar. There, children not even school-age sit in the hot sun breaking rocks, their families living under a regime of peonage and exploitation while state-subsidized companies in China get rich. And we want to send them a half-billion dollars? 

Many cybersecurity and national security professionals believe CRRC presents a danger to our nation’s critical national infrastructure. Those fears, along with the unfair advantages of state subsidies, caused Congress last year to include a clause in the National Defense Authorization Act that would prevent state and local governments from using federal funds to purchase rolling stock from state-owned enterprises.  

This legislation, passed in late 2019 before the coronavirus pandemic and the subsequent emergency financial measures promulgated by Congress and the Federal Reserve, was clearly aimed at leveling the playing field while simultaneously addressing national security concerns.  At issue, however, is language that delays the implementation of the restrictions cited above until January 2021. In sum, if Metra wants to spend money on Chinese equipment they can sneak that in before legislative restrictions come into force.

The issue is more than sending hundreds of millions of U.S. dollars to China. As part of China’s strategic goal to dominate several sectors of the global economy, CRRC has been positioned by the CCP to systematically diminish with intent to destroy the manufacturing capability of European, North American and other Western manufacturers of rolling stock by significantly underbidding on major contracts. Think they can’t succeed? Just ask the erstwhile Australian rolling stock manufacturers and the thousands of Australian workers thrown out of a job when the Aussies succumbed to the lure of save now, pay later. The Australian rolling stock industry for the most part ceased to exist.

State, local and federal officials should shine a white-hot light on this matter and, in keeping with the intent of the federal legislation passed last year, they should encourage decision-makers in Illinois and Chicago to take a step back, ask themselves if they want to support a heavily-subsidized CCP company and contribute to the downfall of Western manufacturing capabilities. 

We have all seen what reliance on China for strategic goods brings us in the pharmaceutical, information technology and other industries. Yes, you save a few bucks up front, but sooner or later you pay the piper. Do you think that after China does secure 80, 90 or 100 percent of the market they are going to continue to offer attractive prices? Think again.

The solution is simple: Don’t do it.

Mark S. Sparkman is a 30-year veteran of the CIA, including as an operations officer, a member of the Senior Intelligence Service and former Chief of Station. He is the chief intelligence officer for Veretus Group, an investigations and strategic intelligence firm in Washington.