Uncommon Sense

December 27, 2013

China Invests in the Rust Belt; the U.S., Not So Much

According to the N.Y. Times, China is investing in Toledo, OH and other Rust Belt cities:

“. . . Toledo turned to China to make the 360 panels, 1,300 pounds each, needed for an extension to the Toledo Museum of Art. Some here resented the move after China supplanted the United States as the world’s top glass producer. But in the process, city leaders began an improbable and remarkable relationship.
“Over the past seven years since the museum project was completed, ties between Toledo and China have grown numerous. Chinese companies have paid more than $10 million in cash for two local hotels, a restaurant complex and a 69-acre waterfront property. Mayor Michael P. Bell has taken four trips to China in four years in search of investors. His business cards are double-sided, in English and Chinese.
“. . . Huaqiao University, one of the largest higher-education institutions in China, recently signed an agreement to open a branch in Toledo. There have also been preliminary talks between local officials and a Chinese company about an arrangement in which industrial tools would be produced in China, shipped for assembly in Toledo and labeled ‘made in the U.S.A.,’ which would allow them to be sold at a premium.
“. . . Chinese companies made $12.2 billion in direct investments in the United States during the first nine months of 2013. That is up from $7.1 billion in all of 2012, which was itself a record at the time, according to the Rhodium Group, a New York-based consulting company.
“. . . Chinese investors have been buying commercial and residential real estate in Detroit, inexpensively because of the city’s financial troubles, and have agreed to finance a $1.5 billion waterfront development in Oakland, Calif. This year, on a trade trip to China, Gov. Jerry Brown of California discussed Chinese investment in the state’s troubled $91 billion bullet train project.
“But Toledo, a largely blue-collar city of about 280,000, appears to be punching well above its weight at a time when mayors from Philadelphia to San Francisco are returning from China empty-handed.”

So the Chinese government has found many things worth investing in the Rust Belt but us, we’re sitting on the sidelines, which is puzzling. There was a time when major construction corporations would be whipping their Republican representatives to create substantial government-financed infrastructure projects. There are projects galore in and around our cities that only government will tackle. The contracts would create jobs for American workers and fix problems that can only get worse. The cost of borrowing the money for the projects (which we would do in any case), is at an all-time low. Labor is cheaper (relatively) than it has been for decades, materials are cheaper than they have been for decades. So, why the reluctance of Republicans to sign on for infrastructure spending?

Please don’t answer “because of the debt” or “because of the budget deficit.” Republicans ordinarily only pay attention to such matters during Democratic administrations and ignore them during Republican administrations, so they are not real concerns, just leverage points. (The last time the “debt” was an issue was when Bill Clinton was President. Under the Bush’s, not a peep.)

What political priority do the Republicans have that precludes them creating big government contracts for a long-time corporate sponsor? They are still going to the mat to support lavish Defense spending, why not spending on construction everyone agrees is the responsibility of the government?

Got an answer? I don’t.


  1. Is the answer found in the Powell Memo?


    Comment by john zande — December 27, 2013 @ 11:39 am | Reply

    • Good question. I went back and re-read it and the answer is “no.” There are some startling things to read in ther, here is just one But the most essential freedoms remain: private ownership, private profit, labor unions, collective bargaining, consumer choice, and a market economy in which competition largely determines price, quality, and the variety of goods and services provided the consumer.” (note the reference to “labor unions” as a freedom.

      Apparently even conservative efforts can be highjacked by libertarians!

      If you don’y ahve a copy of the PE, I will send you one.



      Comment by stephenpruis — December 27, 2013 @ 12:49 pm | Reply

      • What’s PE? It’s probably quite obvious but my brain isn’t working. I just put our Made in China thermometer in the sun for 3 mins and it went passed 50 degrees Celsius. I’m guessing that’s wrong, but it sure feels like it 😦


        Comment by john zande — December 27, 2013 @ 12:53 pm | Reply

        • It’s a typo; I meant to type PM for Powell Memorandum. We’ve had a mini heat wave, got up to 40 . . . Fahrenheit. What a difference a hemisphere makes!

          That would have places it at about 118-120 F which is easily attained in direct sunlight. ‘Sot’, mate! Whew!


          Comment by stephenpruis — December 27, 2013 @ 1:04 pm | Reply

          • Ah, PM, I have it. Makes for some interesting reading.

            So you’re getting mild winter weather but just over the border they’re battling ice storms. Odd weather.


            Comment by john zande — December 27, 2013 @ 1:23 pm | Reply

            • Climate change! We were betting on it when we moved to Chicago. Subzero weather predicted for Monday, though. That would freeze your papayas, mate!


              Comment by stephenpruis — December 27, 2013 @ 1:42 pm | Reply

  2. This is indeed about global corporatism, not nationalities. The universal language of money supersedes any idea of American exceptionalism. So though many working stiffs may want to make this about keeping America strong, the neo-liberals and conservatives in Congress simply see this as a further extension of the new world order that has corporations supplanting democracy.


    Comment by lbwoodgate — December 28, 2013 @ 7:19 am | Reply

    • But construction corporations have a vested interest in getting those big government contracts, just like the defense contractors, so why aren’t they getting them? What’s the difference between nonsensical defense spending and sensical infrastructure spending? Won’t Republican blue collar construction workers like the jobs? Etc.

      So, if other corporate interests are trumpting the corporate interests of the construction corps, what are those interests, I guess is my question.


      Comment by stephenpruis — December 28, 2013 @ 7:39 am | Reply

      • What’s the difference between nonsensical defense spending and sensical infrastructure spending?”

        Good point. The only thing that seems to register in this argument, regardless of how illogical and even harmful it is, is that the GOP is stuck on their promoting their straw man that any spending will hurt the deficit. Yet, as you mentioned, when and if they regain power (god forbid) they will then change their tune and justify such “job creating” policies.

        Their number one priority remains to make Obama and the Dems look bad, not do what’s in the interests of middle-class working families.


        Comment by lbwoodgate — December 28, 2013 @ 8:18 am | Reply

        • I agree, that’s my best estimate. Unfortunately they seem to have no policy propositions but the same old war on the middle class and poor and huzzah for the already rich. If this were a batle over actual policies I would be more respectful of their actions.


          Comment by stephenpruis — December 28, 2013 @ 8:26 am | Reply

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog at WordPress.com.

%d bloggers like this: