Bridge Builder

Jul 19, 2011 by

Did country singer Toby Keith have Michigan in mind when he wrote A Little Less Talk and a Lot More Action?

While Michigan officials talk about building bridges, light-rail transportation and other projects to rebuild our economy, China just does it.

The juxtaposition of the 90th anniversary of the founding of the Chinese Communist Party on July 1 with China’s opening of the world’s longest bridge, the 26.4-mile-long Qingdao Haiwan Bridge, should not go unnoticed.

China is doing big things. This communist, one-party-ruled government is not content to be the low-cost “factory to the world.” It has set its sights on becoming the “innovation nation” before the 21st century gets much older, investing in the Chinese people while America, wallowing in debt — a good portion of it borrowed from the Chinese — is disinvesting in ours.

The bridge opened between the port city of Qingdao and the industrial island of Huangdao in eastern China. Built in just four years, the bridge cost $2.3 billion, according to China’s official news agency, and as much as $8.8 billion by some estimates.

I’d wager to bet that 99 percent or more of those reading this column have never heard of the two areas the bridge connects. Yet Qingdao is home to eight million people and is among the top 10 largest container ports in the world.

It is symbolic of the U.S. having lost another achievement to the Chinese. According to the Guinness Book of World Records, the prior holder of the record for the largest bridge over water is the Lake Pontchartrain Causeway in Louisiana. The Qingdao Haiwan Bridge is 2.5 miles longer.

In reviewing various website reports on the new bridge, these comments stand out:

  • “Meanwhile, we create the world’s longest unemployment line.”
  • “China is building up and America is falling down.”
  • “China spends its money (using the U.S. dollars we send them) on itself while the U.S. gives its money away to other countries, including those who hate us.”
  • “The 21st century belongs to China.”

Ouch!

In 2016 this bridge is likely to be surpassed by an even longer structure linking Hong Kong with the Guangdong Chinese province. The year 2016 is also when, some economists predict, the Chinese are likely to surpass the U.S. as the world’s largest economy.

The International Monetary Fund’s latest forecast predicts that China’s economy will outflank the United States in 2016 based on what’s known as “purchasing power parities” — comparing what residents of both countries earn and spend domestically. While this may shock many, it simply restores the equilibrium for China. It had the world’s largest economy in 18 of the last 20 centuries.

In truth, China’s continued ascendancy both economically and geopolitically is far from certain, given the multiple vulnerabilities and variables from an aging population, inflation, water shortages, ethnic and migrant strife, loss of middle-class economic gains, and environmental degradation that the country faces.

Nevertheless, the myriad of new dams, air/sea ports, roads, bridges, green/alternative energy projects and a 300 mph bullet train — a $33 billion project linking Shanghai to Beijing — serves not only to boost China’s economy, but, like the 2008 Olympics, also its international image. This is a country on the move!

Not only are the Chinese setting records and building 21st century infrastructure, they are building ours as well with a contract to construct a new Bay Bridge in San Francisco. Chinese laborers are building sections of the bridge in China, then shipping the 12 segments for assembly by American workers in San Francisco. It is reported that using Chinese labor and engineers is saving $400 million for the American taxpayers.

Ouch!

Perhaps the Chinese could get the M1 contract unstuck — a $500 million, light-rail transit line talked about for decades in Michigan and scheduled to roll down Woodward Avenue sometime this century. For now it is stuck in limbo with the usual political bickering.

Could the Chinese be the builder (assuming it is ever built) of the new Detroit International River Crossing (DRIC), or as Gov. Snyder calls it, the New International Trade Crossing? Clearly, the Canadian, U.S. and Michigan governments will be looking for the highest value for the taxpayers, right? What would be the true “cost savings” of such a deal?

Interestingly, Clyde V. Prestowitz, president of the Economic Strategy Institute and former counselor to the secretary of Commerce in the Reagan Administration, is reading about the Chinese bridge being built in California and reminding us in a Foreign Policy magazine posting of a Dutch saying: “Goed Koop is Duur Koop,” or “Cheap is expensive.”

Prestowitz points to America’s unemployment rate near 10 percent and workers eager to be put to work. His point: the $400 million “saved” by using cheaper Chinese labor for the bridge work actually costs our country and American workers dearly.

Prestowitz concludes, “I mean, I guess we could have had a cheaper Golden Gate Bridge in 1937 if we had just brought over a bunch of Chinese workers to do the job. But that would have defeated the purpose of building the bridge, which was a major project in the effort to cut U.S. unemployment in the midst of the Depression.”

Ouch!

China’s massive buildup is not without its own challenges. In a recent article in The New York Times, Kenneth S. Rogoff, a Harvard economics professor and co-author of This Time Is Different: Eight Centuries of Financial Folly, has studied China’s boom. He predicts that in the coming years, China’s lofty property bubble and its mounting debts caused by major infrastructure overbuilding could cause not only problems for China but also “a regional recession in Asia and stifle growth in the rest of the world.”

It is in our national interest and the interest of the world that China’s leaders manage their economy well.

As the second decade of the 21st century unfolds, every major issue on the global stage will intersect at the corner of the U.S. and China. We are and will continue to witness an economic seesaw.

A study by the Asia Society’s Center on U.S. China Relations and the Kissinger Institute on China and the U.S. shows an “unprecedented amount of Chinese capital seeking direct investment opportunities abroad: over $1 trillion by 2020, a significant share of which will be destined for the United States.”

We saw anti-China rhetoric raise its ugly head during the last two races for Michigan governor. The anti-Japanese attitude prevalent in the ’70s and ’80s in Michigan drove Japanese investment away from Michigan. We would be foolish to allow that to happen again with the Chinese and forfeit a portion of the expected $1 trillion world-wide investment.

http://domemagazine.com/tomwatkins/tw071711

 

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