Great Wall of China
There are three Texas communities with China in their name: China Spring, China Grove and China, Texas. In the era when China was a mystery, these were among the main Texas references to that ancient land.
However, these communities trace their names from the ornamental China Berry tree, not the country of China.
As a kid I heard countless times the fortunes that could be made in China if the wall opened. The story always revolved around the numbers of people and the scale of economy that would provide. It went along the lines that if you could sell something for $1 profit to everyone in China, you would be wealthy beyond Midas.
Then Nixon went to China and started the process where we’re doing business with the giant despite Tiananmen Square, despite censorship of Google, despite the Hong Kong problem, despite many other identity problems that a former communist county experiences as economic forces transform it into a market economy.
Now that the door is open to the Chinese economy, many are frustrated and alarmed that the process works both ways. China is buying the largest amount of Texas cotton. China is buying the largest amount of Texas pecans. When the state-run China National Offshore Oil Corporation Ltd. (CNOOC) announced a deal with Chesapeake Energy to drill 600,000 acres of the Eagle Ford Shale Formation, which stretches from San Antonio to the border, many alarmists increased their shouts to shut the door. When China bumped up its interest rate earlier today, the markets in the U.S. dropped sharply. And also today, China reportedly halted exports of rare earths used in numerous manufacturing processes as a reaction to U.S. complaints about international trade agreement violations. Rare earth elements are incorporated into many technological devices, including superconductors, samarium-cobalt and neodymium-iron-boron high-flux rare-earth magnets, electronic polishers, refining catalysts and hybrid car components (primarily batteries and magnets. Rare earth ions are used as the active ions in luminescent materials used in optoelectronics applications, most notably the Nd:YAG laser. Erbium-doped fiber amplifiers are significant devices in optical-fiber communication systems. China reportedly mines 95 percent of the planet’s rare earths.
Many view these events with alarm. Many go as far as shouting that China’s economy will swallow the world. Economist Clyde Prestowitz has been trumpeting this as one of the selling points of his new book, Betrayal of American Prosperity. According to Prestowitz, the number one export to China is scrap metal and waste paper. According to Prestowitz, the Chinese trade deficit is the number one threat to the American, and therefore Texan, way of life.
Yet there are many who believe fortunes for Texans are to be made in China.
Earlier this month, Texas Instruments announced it bought a Chinese chip-making firm, Chengdu Cension Semiconductor Manufacturing Corporation Ltd. That plant generates about $1 billion in revenues a year. Many companies in Texas, Dell among them, use cheap labor in China to assemble products to make profits that come back to the U.S.
In addition, there are Texas fortunes to be made in Texas because of China. Texas cotton? In a record year for crop volumes, cotton is at its highest price in 140 years. Chinese drilling in the Eagle Shale Formation? This is a huge investment in Texas, huge even though Texas is in the midst of a drilling boom.
And today, one Chinese company is a key partner in a group of four which are making possible a $2 billion corporate center and airport in Central Texas in Bastrop County. ecoSolargy, a subsidiary of Tianwei Clean Energy of Chengdu, China, develops solar technology and makes thin films for solar-energy collection and other applications. The company plans to make solar panels at the Bastrop County center and target markets in the Southwest, Mexico and Central and South America.
Yes, China is making profits in Texas. And vice versa.