I am one who favors a constructive partnership with China in solving many of the tough global challenges out there — and believe that Zachary Karabell is right that the two economies’ fortunes are fused together for some time, and policy makers need to get their heads around what that means.
What it does not mean is spending very large sums of American government-tied stimulus money hiring Chinese state firms to do work inside the United States. This is a time when US and Chinese interests must put US workers back to work.
When the world economy was flagging in 1997/1998, Lawrence Summers, Timothy Geithner, and Alan Greenspan helped fuel a US consumption bubble to keep the good times going in China and Asia more broadly. Now, China should realize that the key to future global prosperity is rebalancing its economy — and consuming US manufactured products and services.
But today, we learn that a $100 million Manhattan subway project has gone to a Chinese state manufacturing firm, China State Construction Engineering.
Here is the lead:
China State Construction Engineering Corp, the largest contractor in China, has bagged a subway ventilation project worth about $100 million in New York’s Manhattan area, marking the construction giant’s third order in the United States’ infrastructure space this year.
The contract was given to China Construction American Co, a subsidiary, the Wall Street Journal quoted a source as saying.
“The new project, along with the $410-million Hamilton Bridge project and a $1.7-billion entertainment project it won earlier this year, signals China State Construction’s ambition to tap the American construction market,” said Li Zhirui, an industry analyst at First Capital Securities.
Li, however, said the order came as no surprise as the US government is spending massively on infrastructure projects.
The three orders only account for about 4 percent of the value of its total orders this year, Li added.
I hope that the next time Michael Bloomberg has a press conference, one of the media will ask how this policy is defensible at a time when American jobless rates continue to surge.
President Obama will be hosting in December a “jobs summit”. This really should be on the docket for review.
— Steve Clemons