Michael Snyder
Economic Collapse
Jan 23, 2013
What in the world is China up to? Over the past several years, the Chinese
government and large Chinese corporations (which are often at least partially
owned by the government) have been systematically buying up businesses, homes,
farmland, real estate, infrastructure and natural resources all over America.
In some cases, China appears to be attempting to purchase entire communities in
one fell swoop. So why is this happening? Is this some form of “economic
colonization” that is taking place? Some have speculated that China may be
intending to establish “special economic zones” inside the United States modeled
after the very successful Chinese city of
Shenzhen. Back in the 1970s, Shenzhen was just a very small
fishing village, but now it is a sprawling metropolis of over 14 million
people. Initially, these “
special economic zones” were only established
within China, but now the Chinese government has been buying huge tracts of land
in foreign countries
such as Nigeria and establishing special
economic zones in those nations. So could such a thing actually happen in
America? Well, according to
Dr. Jerome Corsi, a plan being pushed by the
Chinese Central Bank would set up “development zones” in the United States that
would allow China to “establish Chinese-owned businesses and bring in its
citizens to the U.S. to work.” Under the plan, some of the
$1.17 trillion that the U.S. owes China would
be converted from debt to “equity”. As a result, “China would own U.S.
businesses, U.S. infrastructure and U.S. high-value land, all with a U.S.
government guarantee against loss.” Does all of this sound far-fetched? Well,
it isn’t. In fact, the economic colonization of America is already far more
advanced than most Americans would dare to imagine.
So how in the world did we get to this point? A few decades ago, the United
States was the unchallenged economic powerhouse of the world and China was
essentially a third world country.
So what happened?
Well, we entered into a whole bunch of extremely unfavorable “free trade”
agreements, and countries such as China began to aggressively use “free trade”
as an economic weapon against us.
Over the past decade, we have lost tens of thousands of businesses and
millions of jobs to China. When the final numbers for 2012 come out, our trade
deficit with China for the year will be
well over 300 billion dollars, and that will be the largest
trade deficit that one country has had with another country in the history of
the world.
Overall, the U.S. has run a trade deficit with China over the past decade
that comes to
more than 2.3 trillion dollars. That 2.3
trillion dollars could have gone to U.S. businesses and U.S. workers, and in
turn taxes would have been paid on all of that money. But instead, all of that
money went to China.
Rather than just sitting on all of that money, China has been lending much of
it back to us – at interest. We now owe China more than a trillion dollars, and
our politicians are constantly pleading with China to lend more money to us so
that we can finance
our exploding debt.
Today, the U.S. government pays China approximately 100 million dollars a day
in interest on the debt that we owe them. Those that say that the U.S. debt
“does not matter” are being incredibly foolish.
So thanks to our massive trade deficit and our exploding national debt, China
is systematically getting wealthier and the United States is systematically
getting poorer.
And now China is starting to use a lot of that wealth to aggressively expand
their power and influence around the globe.
But isn’t it more than a bit far-fetched to suggest that China may be
planning to establish Chinese cities and special economic zones in America?
Not really.
Just look at what has already happened up in Canada. It is well-known that
the Chinese population of Vancouver, Canada has absolutely exploded in recent
years. In fact, the Vancouver suburb of Richmond is now approximately half
Chinese. The following is an excerpt from a
BBC article…
Richmond is North America’s most Asian city – 50% of residents here identify
themselves as Chinese. But it’s not just here that the Chinese community in
British Columbia (BC) – some 407,000 strong – has left its mark. All across
Vancouver, Chinese-Canadians have helped shape the local
landscape.
A similar thing is happening in many communities along the west coast of the
United States. In fact, Chinese citizens purchased
one out of every ten homes that were sold in the state of
California in 2011.
But in other areas of the United States, the Chinese are approaching things
much more systematically.
For example, as I have written about
previously, a Chinese group identified as
“Sino-Michigan Properties LLC” has purchased 200 acres of land near the town of
Milan, Michigan. Their stated goal is to build a “China City” that has
artificial lakes, a Chinese cultural center and hundreds of housing units for
Chinese citizens.
In other instances, large chunks of real estate in major U.S. cities that are
down on their luck are being snapped up by Chinese investors. Just check out
what a
Fortune article from a while back says has
been happening over 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 city’s 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.
Toledo is being promoted to Chinese investors as a “
5-star logistics region“. From Toledo it is
very easy to get to Chicago, Detroit, Cleveland, Pittsburgh, Columbus and
Indianapolis…
With a population of 287,000, Toledo is only the fourth largest city in
Ohio, but it lies at the junction of two important highways — I-75 and I-80/90.
“My vision is to make Toledo a true international city,” Toledo’s Mayor Mike
Bell told the Toledo Blade.
But some of these deals appear to be about far more than just making
“investments”. According to
the Idaho Statesman, a Chinese company known
as Sinomach (which is actually controlled by the Chinese government) was
actually interested in developing a 50 square mile self-sustaining “technology
zone” south of the Boise airport…
A Chinese national company is interested in developing a 10,000- to
30,000-acre technology zone for industry, retail centers and homes south of the
Boise Airport.
Officials of the China National Machinery Industry Corp. have broached the
idea — based on a concept popular in China today — to city and state
leaders.
The article suggested that this “technology
zone” would be modeled after similar projects that already exist in China, and
that Chinese officials were conducting similar negotiations with other U.S.
states as well…
Sinomach is not looking only at Idaho.
The company sent delegations to Ohio, Michigan and Pennsylvania this year to
talk about setting up research and development bases and industrial parks. It
has an interest in electric transmission projects and alternative energy as
well.
The technology zone proposal follows a model of science, technology and
industrial parks in China — often fully contained cities with all services
included.
Thankfully the deal in Idaho appears to be stalled for now, but could we soon
see China establish special economic zones in other communities all around
America?
The Chinese certainly do seem to be laying the groundwork for something.
They have been voraciously gobbling up important infrastructure all over the
country. The following comes from a recent
American Free Press article…
In addition to already owning vital ports in Long Beach, Calif. and Boston,
Mass., the China Ocean Shipping Company is eyeing
major ports on the East Coast and Gulf of Mexico. China also owns access to
ports at the entry and exit points of the Panama Canal.
And due to fiscal woes plaguing many American cities and states, U.S.
legislators have been actively seeking out Chinese investors. In one of the
worst cases, Baton Rouge, La., Mayor Kip Holden offered the Chinese government
ownership and operating rights to a new toll way system if the Chinese would
provide the funding to build it.
Does it make sense for the Chinese to own some of our most important
ports?
Isn’t there a national security risk?
Sadly, there isn’t much of anything that our politicians won’t sell these
days as long as someone is willing to flash a lot of cash.
The Chinese have also been busy buying up important real estate on the east
coast as a recent
Forbes article explained….
According to a recent report in the New York Times, investors from China
are “snapping up luxury apartments” and are planning to spend hundreds of
millions of dollars on commercial and residential projects like Atlantic Yards
in Brooklyn. Chinese companies also have signed major leases at the Empire State
Building and at 1 World Trade Center, the report said.
But it is not only just land and infrastructure that the Chinese have been
buying up.
They have also been purchasing rights to vital oil and natural gas deposits
all over the United States.
There have been two Chinese companies that have been primarily involved in
this effort.
The first is the China National Offshore Oil Corporation (CNOOC).
According
to Wikipedia, CNOOC is 100 percent owned by
the Chinese government…
CNOOC Group is a state-owned oil company, fully owned by the Government
of the People’s Republic of China, and the State-Owned Assets Supervision and
Administration Commission of the State Council (SASAC) performs the rights and
obligations of shareholder on behalf of the government.
The second is Sinopec Corporation. Sinopec Group is the largest shareholder
(approx. 75% ownership) in Sinopec Corporation. And as
the Sinopec website tells us, Sinopec Group is
fully owned by the Chinese government…
Sinopec Group, the largest shareholder of Sinopec Corp., is a super-large
petroleum and petrochemical group incorporated by the State in 1998 based on the
former China Petrochemical Corporation. Funded by the State, it is a State
authorized investment arm and State-owned controlling
company.
So whenever you see CNOOC or Sinopec, you can replace those names with the
Chinese government. The Chinese government essentially runs both of those
companies.
And as you can see from the following list compiled
by the Wall Street Journal, those two
companies have been extremely aggressive in buying up rights to oil and natural
gas all over the nation…
Colorado: 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 Energy’s
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
Energy’s 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 Energy’s 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 ASA’s leases as well as six of Nexen Inc.’s deep-water
wells.
So why is the U.S. government allowing this?
That is a very good question.
For a nation that purports to be pursuing “energy independence”, we sure do
have a funny way of going about things.
Unfortunately, the sad truth is that China is absolutely mopping the floor
with the United States on the global economic stage. China is rising and
America is in an
advanced state of decline. Global economic power has
shifted dramatically and most Americans still don’t understand what has
happened.
The following are 44 more signs of how dominant the economy of China has
become…
1. A Chinese firm recently made a
$2.6 billion offer to buy movie theater chain
AMC.
2. A different Chinese firm made a
$1.8 billion offer to buy aircraft maker
Hawker Beechcraft.
3. In December it was announced that a Chinese group would
be purchasing AIG’s plane leasing unit for
$4.23 billion.
4. It was recently announced that the Federal Reserve will
now allow Chinese banks
to buy up American banks.
5. A
$190 million bridge project up in Alaska was
awarded to a Chinese firm.
6. A
$400 million contract to renovate the
Alexander Hamilton bridge in New York was awarded to a Chinese firm.
7. A
$7.2 billion contract to construct a new
bridge between San Francisco and Oakland was awarded to a Chinese firm.
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. In 2001, American consumers spent 102 billion dollars on
products made in China. In 2011, American consumers spent
399 billion dollarson products made in China.
13. The United States spends
about 4 dollars on goods and services from
China for every one dollar that China spends on goods and services from the
United States.
14. 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.
15. The Chinese economy has grown
7 times faster than the U.S. economy has over
the past decade.
16. The United States has lost
a staggering 32 percent of its manufacturing
jobs since the year 2000.
17. The United States has lost an average of 50,000
manufacturing jobs per month since China
joined the World Trade Organization in 2001.
18. Overall, the United States has lost a total of
more than 56,000manufacturing facilities since
2001.
19. According to the Economic Policy Institute, America is
losing
half a million jobs to China every single
year.
20. Between December 2000 and December 2010, 38 percent of the
manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in
North Carolina were lost and 48 percent of the manufacturing jobs in Michigan
were lost.
21. In 2010, China produced
more than twice as many automobiles as the
United States did.
22. Since the auto industry bailout, approximately
70 percent of all GM vehicles have been built outside the
United States.
23. 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.
24. Back in 1998, the United States had 25 percent of the
world’s high-tech export market and China had just 10 percent. Ten years later,
the United States had less than 15 percent and China’s share had
soared to 20 percent.
25. The United States has lost
more than a quarter of all of its high-tech
manufacturing jobs over the past ten years.
26. China’s number one export to the U.S. is
computer equipment.
27. The number one U.S. export to China is
“scrap and trash”.
28. The U.S. trade deficit with China is now more than
28 times largerthan it was back in 1990.
29. Back in 1985, the U.S. trade deficit with China was
just
6 million dollars for the entire year. For the month of
November 2012 alone, the U.S. trade deficit with China was
28.9 billion dollars.
30. China now
consumes more energy than the United States does.
31. China is now
the leading manufacturer of goods in the entire world.
32. China uses more cement than the rest of the world
combined.
33. China is now
the number one producer of wind and solar
power on the entire globe.
34. Today, China produces
nearly twice as much beer as the United
States does.
35. Right now, China is producing
more than three times as much coal as the
United States does.
36. China now produces
11 times as much steel as the United States
does.
37. China produces
more than 90 percent of the global supply of
rare earth elements.
38. China is now
the number one supplier of components that
are critical to the operation of U.S. defense systems.
39. 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.
40. 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.
41. China now awards
more doctoral degrees in engineering each
year than the United States does.
42. According to one study, the Chinese economy already
has
roughly the same amount of purchasing power as the U.S.
economy does.
43. According to the IMF, China will pass the United States
and will become the largest economy in the world
in 2016.
44. Nobel economist Robert W. Fogel of the University of
Chicago is projecting that the Chinese economy
will be three times larger than the U.S.
economy by the year 2040 if current trends continue.
Without the “globalization” of the world economy, none of this would have
ever happened. But instead of admitting our mistakes and fixing them, our
politicians continue to press for even more “free trade” and even more
integration with communist nations such as China.
In fact,
according to Dr. Jerome Corsi, the U.S.
government has already set up 257 “foreign trade zones” all over America. These
“foreign trade zones” are apparently given “special U.S. customs treatment” and
are used to promote “free trade”…
Corsi noted that the U.S. government has created 257 foreign trade zones, or
FTZs, throughout the United States, designed to extend special U.S. customs
treatment to U.S. plants engaged in international-trade-related activities.
The FTZs tend to be located near airports, with easy access into the
continental NAFTA and WTO multi-modal transportation systems being created to
move free-trade goods cheaply, quickly and efficiently throughout the continent
of North America.
“There is nothing in the U.S. government’s description of FTZs that would
prevent a foreign government, like China, from operating a shell U.S. company
that is in reality owned and financed by the Chinese government and operated
through a Chinese government-owned corporation,” Corsi wrote.
Sadly, we are probably going to see a whole lot more of this in the years
ahead.
According to
Corsi, a professor of economics at Tsighua
University in Beijing named Yu Qiao has suggested the following plan as a way to
transform the debt that the United States owes China into something more
“tangible”…
- China would negotiate with the U.S. government to create a “crisis relief
facility,” or CRF. The CRF “would be used alongside U.S. federal efforts to
stabilize the banking system and to invest in capital-intensive infrastructure
projects such as high-speed railroad from Boston to Washington, D.C.
- China would pool a portion of its holdings of Treasury bonds under the CFR
umbrella to convert sovereign debt into equity. Any CFR funds that were
designated for investment in U.S. corporations would still be owned and managed
by U.S. equity holders, with the Asians holding minority equity shares “that
would, like preferred stock, be convertible.”
- The U.S. government would act as a guarantor, “providing a sovereign
guarantee scheme to assure the investment principal of the CRF against possible
default of targeted companies or projects”.
- The Federal Reserve would set up a special account to supply the liquidity
the CRF would require to swap sovereign debt into industrial investment in the
United States.
Apparently the Bank of China really likes this plan and would like to see
something like this implemented.
In the years ahead, perhaps many of you will end up working in a “special
economic zone” for a Chinese company on a project that is being financially
guaranteed by the U.S. government.
If that sounds like a form of slavery to you, the truth is that you are
probably not too far off the mark.
The borrower is the servant of the lender, and we should have never allowed
ourselves to get into
so much debt.
Now we will pay the price.
To get an idea of how much the world has changed in recent years, just check
out
this incredible photo which contrasts the
decline of Detroit over the years with the amazing rise of Shanghai, China.
Things did not have to turn out this way. Unfortunately, we made decades of
incredibly foolish decisions and we wrecked the greatest economic machine that
the world has ever seen.
Now the future for America looks really bleak.
