Governor of Massachusetts Charlie Baker presides over the groundbreaking of the new CRRC plant in Springfield. Image: Official Twitter of Massachusetts Governor Charlie Baker.

US Rail Sector Sees Major New Chinese Investment

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September was a month of significant milestones in the US rail industry. Ground was broken on a new Chinese-owned train manufacturing facility in Massachusetts early in the month, while a new plan was also announced for a Chinese firm to build a new high-speed rail line between Los Angeles and Las Vegas. The investment in Massachusetts came as part of a larger deal to supply rail cars for Boston’s metropolitan transit rail system, announced last year, which marked the first ever rail industry investment from China in the US.

The new plant in Springfield, Massachusetts is set to employ 150 people and represents an investment of between $60 and $95 million, according to various sources. The facility will be adapted from an existing manufacturing campus that was no longer in use. There, China Railway Rolling Stock Corporation (CRRC) will produce nearly 300 new units to replace ageing cars for the Boston subway network, with finished units rolling off the assembly line in 2018. Employees at the plant will all earn at least $66,000 per year. As China’s largest manufacturer in the rail industry, the company may look to use this investment to build steam towards winning other contracts across the US.

On the other side of the country, the newly announced LA-Las Vegas high-speed rail line is set to be built by a Chinese consortium led by China Railway Group. The timeline for completion has not yet been announced, but construction should begin by September of 2016 with $100 million in initial investment. It will be the first Chinese-made bullet train project in the US. The Obama administration has attempted to make high-speed rail a priority since the beginning of his first term, but progress has been limited due to concerns about cost, among other challenges. China has been rapidly developing its domestic high-speed rail network in recent years, with thousands of miles of new track. The Los Angeles-Las Vegas route will be just 230 miles.

The American rail industry has had successful partnerships with Asia in the past. Most recently, railcars built by Japan’s Kawasaki at its Nebraska manufacturing facility entered service in Washington, DC’s subway system. The governor of Maryland also recently rode Japan’s experimental magnetic levitation train and there is the possibility of a new high-speed project in his state. Historically, US rail infrastructure would not be what it is today if not for the significant efforts of Chinese immigrant laborers in building a portion of the first transcontinental railroad in the 1860s, whose contributions were finally recognized in the Labor Hall of Honor as part of Asian American and Pacific Islander Heritage Month in May, 2014.

Update (June 30, 2016): Las Vegas-based private US firm XpressWest terminated plans in early June 2016 to construct the aforementioned high-speed rail link between Las Vegas and Los Angeles with Chinese consortium China Railway International (CRI), whose companies had apparently struggled to secure “required authority” to commence development activities in a timely manner. XpressWest chief executive Tony Marnell released a statement noting that while the company intends to look beyond China for other potential foreign investors, its ambitions are constrained by a US federal funding requirement stipulating that high-speed trains be manufactured domestically (though no such production is currently ongoing in the United States).