McSally Introduces Bills to Bar US Deals With Companies Linked to Chinese Military

July 22, 2020 Updated: July 22, 2020

Sen. Martha McSally (R-Ariz.) has introduced two measures that would ban the use of federal money to purchase equipment from companies that are affiliated with China’s military.

“China will do anything to supplant the United States as the dominant world power and they’ve been quietly working to gain a foothold in key American sectors, including our technology and transportation sectors,” McSally said in a July 21 press release from her office.

The first of the two bills, named No Funds to China’s Military Acts, would ban the use of federal dollars “to purchase goods or services” from the 20 Chinese companies the Pentagon recently named as having links to the Chinese military.

The ban would take effect immediately in the fiscal year that the bill is enacted, according to the bill text.

In June, the Pentagon compiled the list after Sen. Tom Cotton (R-Ark.) requested that the department identify such companies in compliance with section 1237(b) of 1999’s National Defense Authorization Act (NDAA), the annual defense spending bill. The section called on the Pentagon to determine and publish “Communist Chinese military companies operating in the United States,” as well as any entity that is “owned or controlled by the People’s Liberation Army,” which is the official name of the Chinese military.

The 20 companies include telecom giant Huawei, mobile operators China Mobile and China Telecom, rail car manufacturer CRRC, video surveillance manufacturer Hikvision, shipbuilding companies CSIC and CSSC, aerospace firm AVIC, defense company Norinco, and cloud computing and data-center company Inspur.

CRRC, which is short for China Railway Rolling Stock Corp, is the target of another of McSally’s bills, as she raised concerns about the Chinese rail car manufacturer’s major inroads into the U.S. market in recent years, winning contracts in Boston, Chicago, Los Angeles, and Philadelphia.

Her other bill, called Secure Our Transit Systems from Chinese Interference Act, would amend a section of Title 49 in the United States Code, to immediately ban the use of federal public transit dollars for the purchase of bus and rail rolling stock from Chinese state-owned or state-supported enterprises, according to the press release. Additionally, it would repeal a two-year exemption, adopted in the code after the 2020 NDAA was passed last year.

The 2020 NDAA contains provisions that ban federal money from being used to procure rail cars and buses from “owned or controlled” enterprises, such as those from China—but includes a two-year delay on implementation for transit companies.

Washington Metropolitan Area Transit Authority (WMATA) would be the only exception. Then, in January, WMATA announced that it was no longer considering CCRC as its supplier for the metro’s future projects.

“It’s unbelievable that cities like Chicago are considering transportation bids from companies directly tied to Communist China simply due to the price tag. We cannot allow our public transportation and technology to become a backdoor for the Chinese Communist Party,” McSally said.

Politico reported in early July that Chicago transit authority Metra had not ruled out a bid from CRRC to supply new rail cars.

In May, Washington-based trade group Rail Security Alliance (RSA) warned Metra not to use money from the CARES Act, the COVID-19 stimulus package, to buy new passenger rail cars from CRRC.

“The Illinois railway supply industry supports more than 41,000 genuine manufacturing jobs. Those jobs will be threatened if CRRC secures the Metra contract. CRRC is notorious for manufacturing railcars and components in China and shipping them to the U.S. for final assembly,” RSA said in a statement.

RSA stated that CRRC could outbid its competitors because it receives “funding directly from the Communist Chinese government.” 

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