This American Perspective

The state visit of President Hu (see Abbott and Costello) to Washington highlights a critically important and complex relationship the U.S. must engage in the 21st century.
Many pundents, of course, have weighed in on this matter. But nearly all I think, have missed the really big picture. That is to say, the Chinese are truly reinventing a broad-based capitalist economy.
Just last week, a major Massachusetts solar energy company announced they were closing up shop and moving to China. Sadly, the U.S. plant was built in 2009 and employed over 800 people.
Why then the move from a state of the art facility? Is the cost of labor here too high? No, not according to corporate executives. The reason they are setting sail is because the Chinese government is paying for plant construction and all start up costs. They are also taking a major financial stake in the company. So the risk to ownership is relatively small and they are assured they are moving to a country that insists on being on the cutting edge of this emerging energy technology.
Back in the good old U.S.A., we’ve recently had most members of the Republican party go into near epileptic level fit around a temporary government bailout of a failing auto industry. Imagine how recalcitrant the members of each political party might be around a new form of successful capitalism in which the central government is permanently invested in businesses small and conglomerate.
I envision the current crop of Republicans simply dropping dead clutching their fading copies of Adam Smith. Most Democrats would be loading up on the Prozak.
Yes, we are talking about a revolution for this century. It’s not the Chinese “cultural revolution.” Instead it is the more formidable and portable economic revolution. The newest model going forward is governemnt-private enterprise partnership.
Needless to say this model will take forever to catch on in the United States. Too bad. In the next few years if not decades, our stubborness will cost our country millions of jobs.
The Chinese are not alone in this government business investment model. Just the most broad-based.
Brazil, for example, ten years ago went into the sugar ethanol business and today, their automobiles use no petroleum whatsoever. A huge win for that fast developing country. Still, it is the Chinese who have adopted full scale government investment across nearly their entire economic environ.
More than a decade ago, it was strict conservative dogma that with emerging capitalism, China would be forced toward a more open and humanitarian society. Wrong.
Today, we are told that even temporary government economic investment in our major industries will weaken our competitive advantage. We will go along with this nonsense at our peril.