Happy Dependence Day, Amerikkka! Love, China
Oh say can you see…the end of American independence?
This Fourth of July, the United States celebrates its 235th year of freedom from British rule. That’s emancipated us from yeasty marmite, pesky ‘u’s in our ‘neighbors’ and from having to ask God to “save the Queen”.
Phew. Yes, today we celebrate our independence from Britain.
But we do that by underlining our growing dependence on another country – China. And with our most patriotic of Americana for the day – fireworks and flags.
Nearly 97% of U.S. money for firework imports popped up in China last year, according to U.S. trade statistics. The hard numbers: we paid nearly $200 million for all of our skyrockets, Roman candles, sparklers and other pyrotechnics. More than $190 million of that went to the Middle Kingdom.
As for the Stars and Stripes, about 88% of our money for American flag imports billowed over to China in 2010. U.S. foreign trade statistics show that the U.S. imported $3.2 million worth of flags, and $2.8 million of that went to our top trade partner.
But fireworks and flags, as dazzling or inspiring they may be, are just small examples of a trend that we know has been happening: growing American reliance on Chinese imports and a widening trade gap.
The U.S. China–Business Council’s website highlights America’s burgeoning trade imbalance over the last decade. In 2001, the U.S. ran up a deficit with China of $83 billion. By 2010 however, that number had more than tripled to $273 billion – the largest trade imbalance the U.S. has ever had with a single country.
So as the U.S. suffers from a trade deficit, how does China enjoy its trade excess?
Well, a good deal of that money is found in its domestic infrastructure projects. As an old China hand, I can tell you that around the country China is building out everything from its national road network and subway systems, to its airports, trains and bridges.
According to Caixin, China currently has about 175 airports across the country. By 2013, it aims to build push number up to 230. That’s like building a brand-new airport in each U.S. state in the next year and a half.
China spent $34 billion on its new high-speed rail line linking Beijing and Shanghai. It just opened on June 30 shunting passengers 1,318 kilometers in just under five hours.
And more than $1.5 billion was floated to build the world’s longest bridge in Qingdao, China. That opened on July 1 and spans 41.58 kilometers.
Yes, indeed, China does have cash flow.
Pretty soon, Beijing will be helping us to build our own bridges. Oh wait…it already does. This month the last segments of the new San Francisco cross-bay bridge to Oakland will be shipped from Shanghai. Scheduled for completion by 2013, projects like these just might be a harbinger of things to come: a China that’s moved on from making our flags and fireworks to our major bridges and buildings.
Critics will ask if that’s something to be proud of. I’ll suggest we just happily wave our American flags and light our celebratory fireworks.
And for the evening, try not to think about where they were made.