No joke, China job creator for US
Updated: 2012-10-10 17:48
By Tom McGregor (China Daily)
During election season, US presidential candidates Barack Obama and Mitt Romney have hit the campaign trail bashing China to win over American voters. Democrat and Republican Party politicians seem to be competing in the "who will be toughest on China if elected" contest.
In all likelihood these attacks may be nothing more than empty rhetoric, which would be forgotten shortly after Election Day. However, the American electorate should also take another factor into consideration. Chinese foreign direct investment in the US had been creating jobs, despite a gloomy domestic economy in the past few years.
According to a study conducted by the Kissinger Institute on China and Asia Society, Chinese-owned firms created nearly 20,000 American jobs in the past five years, when jobless figures remained at or above 8 percent. It's possible China helped boost job growth in September as the unemployment rate dipped to 7.8 percent.
The report entitled, An American Open Door? Maximizing the Benefits of Chinese Direct Investments, contends that China-based firms, "established operations and created jobs in at least 35 of the 50 US states and across dozens of industries in both manufacturing and services."
The study's authors, Daniel H. Rosen and Thilo Hanemann of The Rhodium Group, cited Tianjin Pipe Corp building a new steel plant in Texas that employs 2,000 construction workers.
Overall, Chinese enterprises made "$3.5 billion of green-field investments, or investments in new facilities that created 8,000 jobs," according to the study. In 2010 alone, "Chinese direct investment in the US more than doubled annually, surging to over $5 billion."
The report painted an optimistic forecast: "And this is just the beginning. If China follows the pattern of other emerging nations, more than 1 trillion dollars in direct Chinese investment will flow worldwide by 2020, a significant share of which will be destined for advanced markets such as the United States."
With bright prospects, what could dismantle the trend of foreign investments flooding into the US? Very simple, American politicians could reignite belligerent trade wars, pursue isolationist economic policies and engage in anti-China diplomacy. Some signs hint at a new "cold War mentality taking over in Washington".
The Wall Street Journal reports, "President Obama decided recently to block a Chinese-owned firm owning wind farms in Oregon because of national security reasons. Meanwhile, telecom firms like Huawei are suspected of acting as listening posts for the Chinese government, and State-owned Chinese firms are often seen as following political, not economic agendas."
Obama is the first president in 22 years to block a foreign investment into the US on national security grounds through an executive order, which is in reference to Ralls Corp, owned by China's Sany Corp, having been forced to abandon a wind farm project near a military base in Oregon and divest all related assets.
Meanwhile, Republican-controlled Congress is toughening its anti-China stance too. The House Intelligence Committee announced in a report on Monday that, "US companies should avoid doing business with Huawei Technologies Inc and ZTE Corp telecom equipment makers, and recommended regulators block them from buying US companies. It said government computer systems should not include components from them because they might pose an espionage risk," according to the Boston Herald.
However, many high-tech companies already manufacture equipment using Huawei and ZTE components and they haven't complained of so-called defective spy bugs harming their products before. These companies are sophisticated and could detect such flaws instantly if they ever existed.
It should be noted that Huawei currently employs 1,500 American workers in California, Texas and New Jersey.
Nonetheless, these recent actions by US politicians appear as just public posturing to convince voters they deserve to be elected by claiming they're protecting American jobs. Yet, if they really want to reduce the unemployment rate, then it's better to encourage more foreign investments into the US and stop resorting to conspiratorial fear mongering against China.
The views do not necessarily reflect those of China Daily.