State Senator Roger Kahn speaks out about Nexteer on British television.
"Nexteer: Not Trojan Horse, Stab in Heart," Says State Sen. Roger Kahn
New Book, "The Beijing Consensus," Outlines Chinese Economic, Military Aims
January 30, 2011
By: Dave Rogers
Somebody finally had guts enough to say it: The Chinese takeover of Nexteer-Saginaw is a real threat, a disaster waiting to happen.
Like a frog in a pot of water, we are getting used to it even as it nears the boiling point.
But State Sen. Roger Kahn, Saginaw Republican, faced the threat directly when he told British television reporter Sarah Smith last week about Nexteer: "It's not a Trojan Horse, it's a stab through the heart."
The program, aired on British Channel 4, was not broadcast in the U.S., but is available through the following link: http://bcove.me/ejbq4wah
In the British program, Nexteer executive Robert Remenar "makes nice," as would be expected from a dutiful employee, noting that he is thankful for his job and grateful "that we found an investor who embraced the business globally."
The main point made by the program -- and a horribly flawed point in our opinion -- is that there was no U.S. company that would have preserved jobs in Saginaw.
"Western companies have had to disclose details of their technology in order to gain contracts and later have had to compete against Chinese state-owned enterprises selling near-identical products," says author Jack Perkowski on his "Managing The Dragon" website.
Ms. Smith mentioned "downsizing" or bankruptcy as threats Nexteer faced under a U.S. company. We have noted here (see MyBayCity.com Jan. 23, "Did China Save Nexteer From Bankruptcy? Brits Seem to Think So -- We Don't") that downsizing under the Chinese may be the least of the worries of Nexteer's 3,600 employees.
Complete obliteration of those jobs would occur if the firm is wiped out in a move to China in 2015, besides the loss of 1,000 hard won patents that are the heart of a unique American technology base. That is as long as the dragon has promised to keep Nexteer in Saginaw. It is, prophetically and ironically, the length of the company's contract with the United Auto Workers union.
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A review of Stefan Halper's new book "The Beijing Consensus," by Chola Mukanga, the "Zambian Economist," should be required reading for U.S. economic developers -- especially in the Saginaw Valley.
"A week never passes without hearing something about China's rising dominance, writes Mukanga. "The eastern dragon is beginning to dominate international economic and political relations, and with that exposure comes greater global scrutiny. Is China colonizing Africa? Will it initiate global disorder, like empires before it? Will the dragon implode and vanish causing wider global insecurity? These questions reflect not only the fear of change but also points to the fact that the rest of the world does not really understand China nor are we able to come up with the definitive answers about its future.
"Faced with such a vacuous knowledge the narrative about China's place has largely been scripted by ignorant and an impatient media with little time to study the difficult questions. This has produced a rather unhelpful black and white juxtaposition. You either for China's rise or against it."
Mukanga continues:
"Halper marks a refreshing departure by seeking to provide a more nuanced assessment of Beijing's challenge to the global order. Written largely from an American perspective, the central thesis of the book is that although China's emergence on the international stage does pose a serious danger to global order, this is not primarily military. Rather it is a "threat of ideas about how prosperity is attained and the society we want to live in.
"China is championing a market authoritarianism which it is now exporting across the globe. The Chinese model promises rapid growth, stability and a pursuit of better life for poor countries. Absent from this model are the things many in the west believe provide a foundation for a well ordered society e.g. free speech, freedom of worship, open government and loyal political opposition."
Such a model, Halper argues, is proving attractive to dictators and partial democracies as they flock to Beijing to learn how they can stay in power in exchange for economic growth. They are literally learning how to exchange growth for a rod of iron.
"This development poses a strategic challenge to the West, particularly the USA, writes Mukanga. "It diminishes American global leadership and undermines "western values." As more poor and "middle regional sized powers" embrace relations with China, it is increasingly making the West irrelevant in world affairs."
In Halper's words "China is shrinking the West and its values". The process has been accelerated in recent years by the global financial crisis which pushed the world to look towards Beijing. China emerged from the crisis in both substance and tone as the new leader of the global order and that role will become more pronounced in decades to come. The question for western democracies is whether Beijing can be considered a "responsible stakeholder", while its policies continue to enable "systematic repression among its impoverished partners".
A key observation by Halper is that China is not deliberately setting out to diminish the power of the West or its values. Mukanga opines: "It is assuming global economic and political dominance only in response to the incentives facing its leadership as they seek to pacify the masses. The radical pressure from home has forced China's leadership to focus squarely on growth and sacrifice all else on its altar.
"Unfortunately (or fortunately) the globalization of information has also made Beijing vulnerable to international pressure. This competing tension between domestic and international pressures has led to the emergence of "two Chinas" which co-exist in the international system, a "good neighbor and the rogue state". But far from giving the West greater room for pressure, the duality in China's global presence limits the extent to which the democratic West can steer Beijing to a more positive course.
"China will continue to rely and aid the global governance structures for its benefit while it simultaneously subverts them for the sake of internal advantages. Beijing will continue to export its market authoritarian model as long it keeps the leaders in power."
Mukunga continues: "There's growing evidence throughout sub-Saharan Africa that Beijing's influence is growing. China nowadays produces everything from shoes to space crafts. It exports all things from cars to people.
"However, the central issue remains whether Beijing really has begun to export its model or whether that is simply a fear that is yet to be realized. It is not clear from the evidence in the book whether Beijing's influence is leading to the replacement of genuine democratic ideas and practice with illiberal democracy in developing nations or whether it is merely preventing the emergence of more democratic states.
The lack of clarity and clear evidence on this matter is a major weakness of Halper's narrative. Indeed The Beijing Consensus does acknowledge the flaws and inevitable downfall of the American led 'Washington Consensus.'
It therefore begs the question what these "western values" and practices being eroded are. Is it merely American dominance, for better or for worse? For many poor nations there's little difference between a Beijing dominated world and an American one.
Globally, one would imagine that the counter-factual would see increasing dominance of America ideas. That raises the question of whether such a model is necessarily better than a duopolistic arrangement at the top, or indeed outright Beijing dominance. Although the USA maintained global stability for half a century, in recent years its activities has kept much of the world poor, some would say deliberately to maintain its dominance.
"Equally surprisingly is Halper's somewhat narrow assessment of Beijing's military dominance. It is certainly the case that Beijing poses no direct military threat to the West but it does appear to be directly challenging western military influence in Africa. After the USA sought to establish Africom a number of nations roundly rejected those advances after pressure from Beijing.
"It is illogical to expect nations that invest billions in other nations, not to back up that investment with some guarantee of security. China growing global integration is bound to be accompanied by greater military intervention as it seeks to secure global supply. This is the most worrying aspect of China's reach in developing nations and one slightly underplayed by Halper."
The U.S. has the unfortunate handicap of failing to recognize threats, perhaps stemming from overconfidence based on traditional world supremacy. Witness the allegations that some 85 different warnings about the 9-11 hijackings were ignored. We have ample warning on the economic threat posed by China to our way of life. Will we act, as Sen. Kahn's statement indicates, or will we wait until the frog is boiled alive?
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