Thread by @KeepitMadeinUSA

HAPPENING NOW: @ScottPaulAAM is testifying during today's House Transportation & Infrastructure Committee hearing on “The Impacts of State-Owned Enterprises on Public Transit and Freight Rail Sectors."

WATCH LIVE: ow.ly/VBJC50ueQaJ

We'll also live tweet in this thread.

Things kick off w/ Chairman @RepPeterDeFazio saying that today's hearing will look at the ways China can decimate the U.S. rail & transit market. "It's not just about the ultimate assembly, it's about all the parts that go into these vehicles and all the jobs that they support."

SOEs like CRRC and BYD are heavily subsidized by the Chinese government, DeFazio notes, allowing them to bid for govt contracts at unfairly low prices. Meanwhile, the products they make have big problems. More background on that: latimes.com/local/lanow/la…

Ranking Member @RepSamGraves says that "safety and cyber security" have to remain top priorities for mass transit, including rail & buses.

.@ScottPaulAAM is the first witness. He tells the panel that China's model of state-led capitalism has contributed to the loss of 3.4 million U.S. jobs. China heavily subsidizes tens of thousands of businesses in "every industry imaginable."

.@ScottPaulAAM notes U.S. companies have been "competing with an entire nation." Now, state-owned enterprises like CRRC & BYD are aiming to take over America's infrastructure, systematically working to drive competitors out and take over the market.

Up next: Brig. Gen. John Adams, who echoes Scott's concerns about CRRC's ties to the Chinese government. Adams also notes that U.S. transit like D.C. Metro is a target for Chinese espionage. More on that here: washingtonpost.com/local/traffica…

Freight rail is another big concern, Adams says. The Defense Department relies heavily on it, and allowing a Chinese SOE to have access to this important system is a major security concerns. "We must safeguard our U.S. rail systems," he says.

Hamilton Galloway, the Head of Consultancy, Americas at Oxford Economics, says China's SOE practices threaten 65,000 American jobs across the supply chain.

"It is imperative that policymakers promptly acknowledge, access and respond to the SOEs making headway in the U.S. rail industry to prevent the loss of thousands of jobs, as well as hundreds of millions in wages, GDP and taxes," Galloway says.

Frank Cilluffo, the director of @AuburnCyber, says that examples like CRRC are "consistent of a broader strategy" by China to use SOEs to gain entry and capture marketshare -- and possibly use that access for espionage purposes.

"National security and free markets are not either/or," Cilluffo says, pointing out that we can tackle security threats from SOEs while also keeping the economy running.

One thing that keeps coming up today among the witnesses: Made in China 2025, China's plan to take over critical industries. The plan includes railway equipment, green energy and vehicles, and more.

There's also been repeated concern about the safety of our freight rail systems. Brig. Gen. John Adams notes that not only does the military use it to transfer goods, but it's also connected to other key infrastructure, like ports. It's critical we safeguard this infrastructure.

Hamilton Galloway of Oxford Economics says it is possible that we lose our rail systems in 10 years if nothing is done. We need a long-term solution to address SOEs as a whole.

.@ScottPaulAAM says CRRC is "predatory" in their pursuit of dominating the global market. "They drive competition out," he says, noting that U.S. companies don't have the same access to China's market that the U.S. provides to China. "We should insist on reciprocity."

Brig. Gen. John Adams notes that CRRC is "guided from the top." CRRC officials have direct ties to the Chinese government. "They don't do anything independently," he says. "This is just one front in a broad campaign."

.@RepBost points out that what's happening in the transit space is very similar to what has happened in the steel industry: China subsidies its industry, then prices its products unfairly low to take over the U.S. market.

.@ScottPaulAAM echoes Bost's point, noting that Chinese SOEs like CRRC and BYD were bit players 20 years ago, but managed to take over the global market because of the direct support of the Chinese government.

We know that China has and uses facial recognition technology, Brig. Gen. John Adams notes. We don't want to give China the opportunity to install this technology on our own transit systems, particularly in cities like Washington. "They will exploit it," he says.

.@ScottPaulAAM predicts that if CRRC manages to monopolize the rail market as it desires, it will raise its prices and quality will go down. Jobs up-and-down the supply chain will also be lost.

.@ScottPaulAAM says he is "very concerned" with BYD's plans to sell passenger cars in the United States, as its chairman "has boasted of plans to dominate world auto sales by 2025." That's a direct threat to the U.S. auto industry.

To put the reach of China's SOEs into perspective, there are 51,000 of them and they are valued at $29 trillion. But the support they get from the Chinese government is incalculable. "It is the world's largest racket," @ScottPaulAAM says.

We have not put in place a strategy to deter China's SOEs. Rather than taking on China's bad behavior, we are rewarding it by giving contracts to entities like CRRC and BYD, says Frank Cilluffo of @AuburnCyber.

One way to encourage more U.S. transit manufacturing is to pass a robust infrastructure investment bill, @ScottPaulAAM says. This will give American companies confidence to invest and build these products.

CRRC is able to underbid other companies because it isn't designed to make a profit. "It is a tool of Chinese state power," @ScottPaulAAM says.

Brig. Gen. John Adams notes that one of the targets of Chinese espionage is likely Chinese-American citizens who are critics of China's government. We shouldn't hand over our transit rail cars to help them build such espionage capabilities and put our own citizens at risk.

.@ScottPaulAAM notes that there has to be a level-playing field for companies fairly competing for government contracts. SOEs like CRRC shouldn't be allowed to bid as long as it has such strong ties to the Chinese government.

That's a wrap from today's hearing! You can find a copy and video of @ScottPaulAAM's opening testimony here: americanmanufacturing.org/press-releases…