As Robert Reich recently pointed out, President Obama is happy with China's agreement to buy $45 billion of American exports. The president says this will create more American jobs. That's not exactly right. It will create more profits for American companies but relatively few jobs.
Nearly half of the deal is for two hundred Boeing aircraft whose parts come from all over the world. The rest involves agricultural commodities that don't require much US labor because American agribusiness is highly automated, and chemical and high-tech goods that are even less labor-intensive.
General Electric and other companies are signing up for deals with China involving energy and aviation manufacturing. But much of this will be done in China. GE's joint venture with Aviation Industries of China, to develop new integrated avionics systems (which presumably will find their way into Boeing planes) will be based in Shanghai.
Here's the real story. China has a national economic strategy designed to make it and its people the economic powerhouse of the future. They're intent on learning as much as they can from us and then going beyond us (as they already are in solar and electric-battery technologies). They're pouring money into basic research and education at all levels. In the last 12 years they've built twenty universities, each designed to be the equivalent of MIT. They're investing in huge mining operations in Afghanistan and Iraq, while we squander billions killing people and being killed.
Their goal is to make China number one in power and prestige -- and in high-wage jobs.
Meanwhile, the United States doesn't even have a national economic strategy. Instead, we have global corporations that just happen to be headquartered here. Their goal is to maximize profits, wherever they can make the most money. They'll make things in America for export to China when that's most profitable, and they'll make it in China and give the Chinese their know-how when that's the best short-term way to boost their bottom line. They'll do research and development around the world, wherever it will deliver the biggest bang for the buck. America was their launching pad. Increasingly, they no longer need American workers.
Meanwhile, Republicans and deficit hawks are cutting publicly-supported R&D in the US. And cash-starved states are cutting K-12 education, and slashing the budgets of their great public research universities, such as the University of California at Berkeley. America seems to be heading for third-world status.
No contest. China wins.