In this May 2020 file photo, CRRC employees work on an assembly line in Yibin, Sichuan province (ZHUANG GEER / CHINA DAILY)

Rail car maker CRRC has provided subway cars to transit systems across the United States and the world. It has built factories in the US and provided jobs for people in the US.

Now the company and six other firms find themselves removed by a provider of major global stock indexes for political reasons.

Index provider MSCI Inc on Tuesday moved to delete the securities of the companies after the administration of US President Donald Trump banned purchases of their shares by executive order in November. The move followed similar steps by index rivals, including FTSE Russell and Nasdaq.

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Investors do not expect the administration of US President-elect Joe Biden to act quickly to change rules that bar new investment in some Chinese companies, an MSCI executive told Reuters on Wednesday.

During a consultation with more than 100 clients on how to reshape its indexes around the restrictions, MSCI found the conventional wisdom to be that altering the rules "is not the highest priority for the Biden administration", Sebastien Lieblich, the Paris-based head of index research for MSCI, said in an interview.

Along with similar steps by S&P Dow Jones Indices and FTSE Russell, the move means index-tracking funds will need to divest. The firms will be pulled from the indexes on Jan 5.

The seven companies were among 35 listed by the US Department of Defense as owned or controlled by the Chinese military.

China has condemned the moves, saying the effort runs counter to principles of market competition.

Over the last several years, CRRC, a State-owned company based in Beijing, has landed billions of dollars' worth of contracts to build rail cars for transit systems in metropolitan Boston, Chicago, Philadelphia and Los Angeles.

Facility building

CRRC Sifang America Inc has built a more than 35,300-square-meter facility on the South Side of Chicago that opened last year. For its Chicago Transit Authority rail cars, the facility sources 70 percent of the components from US manufacturers.

In November, House Armed Services Committee Chairman Adam Smith, a Democrat from Washington state, said claims that CRRC was a national security threat were being voiced by US manufacturers who want to legislate the competition out of business.

He said that if China planted "listening devices in the trains ... they... (would) hear people (complain) about their boss on their way home from work".

CRRC is building passenger rail cars in America, by Americans, for Americans.

Marina Popovic, human resources director and chief legal counsel for CRRC Sifang America.

"To fully understand the facts, benefits and jobs CRRC Sifang America has brought to the US marketplace, please visit CRRC's factory," said Marina Popovic, human resources director and chief legal counsel for CRRC Sifang America.

"CRRC has built a state-of-the-art passenger railcar manufacturing facility on the South Side of Chicago. It employs approximately 100 people, including well-paid union workers. CRRC expects to hire approximately 100 more workers in the coming year. At the end of the day, the reality is rather simple. CRRC is building passenger rail cars in America, by Americans, for Americans."

A provision in the US fiscal 2020 defense bill would ban transit agencies from procuring rolling stock from companies that are owned or subsidized by the Chinese government.

The House bill would ban only rail cars. The Senate version would include buses, politico.com reported in November. "As it happens, there are no domestic rail car producers for it (CRRC) to compete with," the Chicago Tribune Editorial Board wrote in October.

CRRC's plant brought back the manufacture of rail cars in the city for the first time in 50 years.

CRRC's plant in Springfield, Massachusetts, which opened in 2018, is 18,950 sq m and has more than 300 employees. The Chicago and Springfield sites contain test tracks. In Los Angeles, the company has a smaller facility that employs 50 workers.

As for MSCI, it said it would launch versions of some indexes that retain the securities of the barred Chinese companies.

READ MORE: CRRC gears up for global expansion

Agencies contributed to this story.

Contact the writer at hengweili@chinadailyusa.com