By Michael Snyder
~ June 9, 2013
Are you ready for a future where China will employ millions of American
workers and dominate thousands of small communities all over the United
States? Such a future would be unimaginable to many Americans, but the
truth is that it is already starting to happen. Chinese acquisition
of U.S. businesses set a new all-time record last year, and it is on
pace to absolutely shatter that record this year.Meanwhile, China is voraciously gobbling up real estate and is
establishing economic beachheads all over America. If China
continues to build economic power inside the United States, it will
eventually become the dominant economic force in thousands of
small communities all over the nation.Just think about what the Smithfield Foods acquisition alone will
mean. Smithfield Foods is the largest pork producer and processor in
the world. It has facilities in 26 U.S. states and it employs tens of
thousands of Americans. It directly owns 460 farms and has contracts
with approximately 2,100 others. But now a Chinese company has bought
it for $4.7 billion, and that means that the Chinese will now be the most
important employer in dozens of rural communities all over America.If you dont think that this is important, you havent been paying
much attention to what has been going on in the world. Thanks in part
to our massively bloated trade deficit with China, the Chinese have
trillions of dollars to spend. They are only just starting to exercise
their economic muscles.And it is important to keep in mind that there is often not much of a
difference between the Chinese government and Chinese corporations.
In 2011, 43
percent of all profits in China were produced by companies that the
Chinese government had a controlling interest in. Americans are
accustomed to thinking of government and business as being separate
things, but in China they are often one and the same. Even when there
is a separation in ownership, the reality is that no major Chinese
corporation is going to go against the authority and guidance of the
Chinese government. The relationship between government and business in
China is much different than it is in the United States.Over the past several years, Chinese companies have become
increasingly aggressive. Last year a Chinese company spent $2.6 billion
to purchase AMC entertainment one of the largest movie theater chains
in the United States. Now that Chinese company controls more movie
ticket sales than anyone else in the world. At the time, that was the
largest acquisition of a U.S. firm by a Chinese company, but now the
Smithfield Foods deal has greatly surpassed that.But China is not just relying on acquisitions to expand its economic
power. The truth is that economic beachheads are being established
all over America. For example, Golden Dragon Precise Copper Tube
Group, Inc. recently broke ground on a $100
million plant in Thomasville, Alabama. I am sure that many of the
residents of Thomasville, Alabama will be glad to have jobs, but it will
also become yet another community that will now be heavily dependent on
communist China.And guess where else Chinese companies are putting down roots?
Detroit.Yes, the poster child for the deindustrialization
of America is being invaded by the Chinese. The following comes
from a recent CNBC
article“Dozens of companies from China are putting down roots in
Detroit, part of the countrys steady push into the American auto
industry.“Chinese-owned companies are investing in American businesses and
new vehicle technology, selling everything from seat belts to shock
absorbers in retail stores, and hiring experienced engineers and
designers in an effort to soak up the talent and expertise of
domestic automakers and their suppliers.”If you recently purchased an American-made vehicle, there is a
really good chance that it has Chinese parts in it.In fact, it is becoming harder and harder to get auto parts that are
actually made in America by American companies. A lot of those
companies are dying off. One example of this is a battery maker that
had received $132 million from the federal government that was
recently gobbled up by a huge Chinese corporation“Industry analysts are hard-pressed to put a number on the
Chinese suppliers operating in the United States. We simply dont
know how many there are, said David Andrea, an official with the
Original Equipment Suppliers Association, a trade organization for
auto parts makers.“In one of the more prominent deals, the Wanxiang Group bought
most of the assets of the battery maker A123 Systems, which filed
for bankruptcy last year despite receiving $132 million of $249
million in federal grants to build two factories in Michigan.“Congressional Republicans criticized the deal, saying A123′s
technology could support military applications in China. Still, the
buyout was approved this year by the Committee on Foreign Investment
in the United States, a federal government panel.”China seems particularly interested in acquiring energy resources in
the United States. For example, did you know that China is actually
mining for coal in the mountains of Tennessee?Guizhou Gouchuang Energy Holdings Group spent 616 million dollars to
acquire Triple H Coal Co. in Jacksboro, Tennessee. At the time, that
acquisition really didnt make much news, but now a group of
conservatives in Tennessee is trying to stop the Chinese from blowing up
their mountains and taking their coal. The following is from a Wall
Street Journal article back in MarchThe Tennessee Conservative Union began airing an ad Tuesday that
says lawmakers have failed to protect the states scenic mountains
and are allowing the Chinese to destroy our mountains and take our
coal the same folks who hold our debt.But when it comes to our energy resources, China has been most
interested in our oil and natural gas. It is a complete and total
mystery why the federal government would allow China to buy up our
precious domestic sources of energy, but it is happening. The following
is a list of some of the oil and natural gas deals that China has been
involved in during the last few years that was compiled by
the Wall Street JournalColorado: Cnooc gained a one-third stake in
800,000 acres in northeast Colorado and southeast Wyoming in a $1.27
billion pact with Chesapeake Energy Corp.Louisiana: Sinopec has a one-third interest in
265,000 acres in the Tuscaloosa Marine Shale after a broader
$2.5-billion deal with Devon Energy.Michigan: Sinopec gained a one-third interest in
350,000 acres in a larger $2.5 billion deal with Devon Energy.Ohio: Sinopec acquired a one-third stake in
Devon Energys 235,000 Utica Shale acres in a larger $2.5 billion
deal.Oklahoma: Sinopec has a one-third interest in
215,000 acres in a broader $2.5 billion deal with Devon Energy.Texas: Cnooc acquired a one-third interest in
Chesapeake Energys 600,000 acres in the Eagle Ford Shale in a
$2.16-billion deal.Wyoming: Cnooc has a one-third stake in 800,000
acres in northeast Colorado and southeast Wyoming after a $1.27
billion pact with Chesapeake Energy. Sinopec gained a one-third
interest in Devon Energys 320,000 acres as part of a larger $2.5
billion deal.Gulf of Mexico: Cnooc Ltd. separately acquired
minority stakes in some of Statoil ASAs leases as well as six of
Nexen Inc.s deep-water wells.How could we be so stupid?
Sadly, as our politicians endlessly bicker, China just continues to
aggressively push ahead.And pretty soon China may want to build entire cities in the
United States just like they have been doing in other countries.
According to
Bloomberg, right now China is actually building a city larger than
Manhattan just outside of the capital of Belarus“China is building an entire city in the forests near the
Belarusian capital Minsk to create a manufacturing springboard
between the European Union andRussia.“Belarusian President Aleksandr
Lukashenkoallotted an area 40 percent larger than Manhattanaround
Minsks international airport for the $5 billion development, which
will include enough housing to accommodate 155,000 people, according
to Chinese and Belarusian officials.”And this is actually already happening on a much smaller scale in
this country. For example, as I have written about previously,
a Chinese company known as Sino-Michigan Properties LLC has purchased
200 acres of land near the little town of Milan, Michigan. Their stated
goal is to construct a China City that has artificial lakes, a Chinese
cultural center and hundreds of housing units for Chinese citizens.In other cases, large chunks of real estate in the middle of major
U.S. cities are being gobbled up by Chinese investors. Just check out
what a Fortune article from a while back says has been happening in Toledo, Ohio“In March 2011, Chinese investors paid $2.15 million cash for a
restaurant complex on the Maumee River in Toledo, Ohio. Soon they
put down another $3.8 million on 69 acres of newly decontaminated
land in the citys Marina District, promising to invest $200 million
in a new residential-commercial development. That September, another
Chinese firm spent $3 million for an aging hotel across a nearby
bridge with a view of the minor league ballpark.”Are you starting to get the picture?
China is on the rise and America is
in decline. If you doubt this, just read the following list of
facts which comes from one of my previous articles entitled 40
Ways That China Is Beating America#1 As I mentioned above, when you total up all
imports and exports of goods, China is now the
number one trading nation on the entire planet.#2 During 2012, we sold about 110
billion dollars worth of stuff to the Chinese, but they sold about 425
billion dollars worth of stuff to us. That was the largest trade
deficit that one nation has had with another nation in the history of
the world.#3 Overall, the U.S. has run a trade deficit with
China over the past decade that comes to more
than 2.3 trillion dollars.#4 China now has the largest
new car market in the entire world.#5 China has more
foreign currency reserves than anyone else on the planet.#6 China is the number
one gold producer in the world.#7 China is also the number
one gold importer in the world.#8 The uniforms for the U.S. Olympic team were made
in China.#9 85 percent of all artificial Christmas trees are made in China.
#10 The new
World Trade Center tower is going to include glass that has been
imported from China.#11 The new Martin Luther King memorial on the
National Mall was made in China.#12 One of the reasons it is so hard to export stuff
to China is because of their tariffs. According to the
New York Times, a Jeep Grand Cherokee that costs $27,490 in the
United States costs about $85,000 in China thanks to all the tariffs.#13 The Chinese economy has grown 7
times faster than the U.S. economy has over the past decade.#14 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#15 The United States has lost an average of 50,000 manufacturing
jobs per month since China joined the World Trade Organization in
2001.#16 Overall, the United States has lost a total of more
than 56,000manufacturing facilities since 2001.#17 According to the Economic Policy Institute,
America is losing half
a million jobs to China every single year.#18 China now produces more
than twice as many automobiles as the United States does.#19 Since the auto industry bailout, approximately 70
percent of all GM vehicles have been built outside the United
States.#20 After being bailed out by U.S. taxpayers,
General Motors is currently involved in 11
joint ventures with companies owned by the Chinese government. The
price for entering into many of these joint ventures was a transfer of
state
of the art technology from General Motors to the communist Chinese.#21 Back in 1998, the United States had 25 percent
of the worlds high-tech export market and China had just 10 percent.
Ten years later, the United States had less than 15 percent and Chinas
share had soared
to 20 percent.#22 The United States has lost more
than a quarter of all of its high-tech manufacturing jobs over the
past ten years.#23 Chinas number one export to the U.S. is computer
equipment, but the number one U.S. export to China is scrap
and trash.#24 The U.S. trade deficit with China is now more
than 30
times larger than it was back in 1990.#25 China now consumes
more energy than the United States does.#26 China is now the leading manufacturer of goods in the entire world.
#27 China uses more cement than the rest of the
world combined.#28 China is now the
number one producer of wind and solar power on the entire globe.#29 There are more pigs in China than in the next 43
pork producing nations combined.#30 Today, China produces nearly
twice as much beer as the United States does.#31 Right now, China is producing more
than three times as much coal as the United States does.#33 China now produces 11
times as much steel as the United States does.#34 China produces more
than 90 percent of the global supply of rare earth elements.#35 China is now the number
one supplier of components that are critical to the operation
of U.S. defense systems.#36 A recent investigation by the U.S. Senate
Committee on Armed Services found more
than one million counterfeit Chinese parts in the Department of
Defense supply chain.#37 15 years ago, China was 14th in the world in
published scientific research articles. But now, China is expected to
pass the United States and become number one very shortly.#38 China now awards more
doctoral degrees in engineering each year than the United States
does.#39 The average household debt load in the United
States is 136% of average household income. In China, the average
household debt loadis
17% of average household income.#40 The Chinese have begun to buy up huge amounts of
U.S. real estate. In fact, Chinese citizens purchased one
out of every ten homes that were sold in the state of California in
2011.And what we have seen so far may just be the tip of the iceberg as
far as Chinese investment in U.S. real estate is concerned. The
following is a brief excerpt from a Bloomberg article that was posted just last week“China is studying the possibility of investing a portion of its
$3.4 trillion in foreign-exchange reserves in U.S. real estate, said
two people with direct knowledge of the situation.“The State Administration of Foreign Exchange began the study
after seeing signs of a recovery in the U.S. property market, said
the people, who asked not to be identified as they werent
authorized to speak publicly about the matter. China may acquire
properties, invest in real estate funds or buy stakes in property
companies, they said. The safety of the investments will be the top
priority, said the people, who didnt elaborate on a timetable or
other details.”So what can we do about all of this?
Unfortunately, not a whole lot. Both major political parties seem to
be fully convinced that merging our economy with the economy of
communist China is a great idea. I would not expect major changes in
our policies regarding China any time soon.For now, I will just leave you with one piece of advice
Learn to speak Chinese. You might need it someday.