Chinese firm spans the globe to build construction experience

Scott Tong Jul 25, 2011

Chinese firm spans the globe to build construction experience

Scott Tong Jul 25, 2011

Kai Ryssdal: A couple of weeks ago, we ran a series of stories that I reported in China about how China has changed over the past five years. Today we’ll turn that around and ask where China sees itself going in the next five years.

What we know so far is that corporate China’s investment around the world — with government support — is about to explode with investments, acquisitions and corporate partnerships. Is that scary? Good? Or both of the above?

We sent our former Shanghai bureau chief Scott Tong to New York City to find out.

Scott Tong: As metaphors go, it’s hard to beat this: A bridge in our financial capital, named after our first Treasury secretary, crumbling, and getting fixed with Chinese money.

Chris Larsen: The project that we’re doing is called the Alexander Hamilton Bridge reconstruction.

That’s Chris Larsen with construction firm Halmar International. It’s teamed up with a Chinese firm on this $400 million bridge rebuild. Every day, right above these workers heads, 188,000 vehicles rumble between Harlem and the Bronx.

Larsen: The Alexander Hamilton Bridge is very close to the George Washington Bridge. And also as part of I-95 brings a lot of commuter traffic. And obviously with the Yankee games, it just doubles the amount of traffic in the area.

Yankee Stadium is steps away, where these two companies also built a subway stop. So why a Chinese partner? I turns out it is the designated financial hitter. China Construction America is part of $54 billion behemoth that takes in more revenue than Caterpillar, or Coca-Cola or Disney. So the Chinese brought the cash, the Americans the local expertise. Oh, and the union workers.

Gene Flood: My name’s Gene Flood. I’m from the Bronx.

Gene’s Flood’s been with Ironworkers Local 40 for three decades. Never seen a paycheck quite like this.

Flood: Symbols, it’s signed in Chinese symbols. That was a little strange. But other than that, the money’s good and we appreciate the work.

A little strange? Get used to it. Chinese capital is coming — $5 billion came last year, and that could double every year.

MIT’s Ed Steinfeld says corporate China’s got an issue: too much cash.

Ed Steinfeld: These companies are frequently looking for things to do with their cash. And going abroad — particularly to the United States — is an appealing option. They view going abroad as a critical learning experience.

Though China already has learned a ton, given all the building out in China.

Steinfeld: Subways, high-speed rail, airports, power plants, these are all being built in China. And in those kind of industries, you learn by building.

So yes, the Chinese know their forklifts. Quality is a whole ‘nother thing. China Construction shipped over Chinese steel for part of the bridge.

But Chris Larsen at Halmar found problems with the welding in the early batches. Do over.

Larsen: We re-fabricated entire sections of the bridge. Frankly, what we learned is to reject it in China before it even got on the sea.

Larsen figures the lesson is: China won’t be an overnight success.

Larsen: I see it taking decades. I don’t see any of them being major competition for us here in the United States — probably for the rest of my career, at least.

That’s debatable. For now, though, there’s politics. Chinese steel is also being used to rebuild the San Francisco’s Bay Bridge. You may have heard the outrage over outsourcing of steel jobs.

New York ironworker Julia Murray.

Julia Murray: If it means that our unemployment level is higher, that to me feels a little backwards.

Protectionism feels good — to block Chinese stuff and Chinese money. But Dan Rosen at the Peterson Institute for International Economics says: beware.

Dan Rosen: If we don’t put a lid on that and manage it over time — many, many billions of dollars in investments in American communities can be chased away.

We put this question to China Construction America, but they didn’t take any questions. That’s how it works in China. But here, talk-to-the-hand could backfire on Chinese firms.

Rosen: They’re going to be tarnished by perceptions that there’s something unscrupulous about how Chinese companies operate.

For skeptics, Rosen says Chinese companies — even government-owned firms — tend to come for the same reason everyone else does: to try to make a profit.

In the Bronx, I’m Scott Tong for Marketplace.

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