I have some trouble explaining my reluctance to do business with China. Perhaps it is just stubbornness or my inability to move on from my long established Cold War mentality, but I simply do not trust the dictatorial Communist Party government that still runs the place. Sure, they may be more interested in making money now than they were in the 1950s, 60s, and 70s, but there really has not been much change in their dominance of the economy or in the personal lives of the Chinese people.
Perhaps my life experience that makes me nervous about a business relationship with China is that I spent some time in the plastics products business and engaged in some head to head competition with some enterprises that had a different view of fair play than I do. The little company that I used to manage had been making some good returns – and employing some hard working Americans at a decent wage – until they were pushed out of the market that they developed by a Chinese company that copied their toy designs. The copies were so close that the mold markings were almost identical – the only real change was the elimination of the “Made in the USA” phrase on the sinking sticks and rings that made up most of the USA Play line of brightly colored pool toys.
Back in those days in the plastics business, I met several prosperous marketing types whose main skill was to take American made products to China to be copied and then produced in mass quantities using laborers who worked 60 hours per week for an average of $20. These marketing people were glad handers and socially well-connected, but I had difficulty spending much time in the same room with them. I was too busy trying to find new markets where our factory’s products could continue to compete so that we could stay in business. The strategy worked for a while, but I eventually got tired of the effort/reward ratio and decided to go back to my old job as a naval officer.
My time in plastics (1996-1999) was an effort to learn as much as I could about running a manufacturing enterprise while I continued to develop the Adams Engine(TM) concept and business model. That was a particularly dark time in the nuclear energy business. There were few people interested in actually building atomic power plants in those years – I once attended an American Nuclear Society (ANS) meeting where the exposition floor was dominated by companies in the D&D (decommissioning and decontamination) business. That was my last meeting for about 5 years – it was really depressing.
Whenever I talked about Adams Atomic Engines, Inc. during those years, people asked me why I did not take my ideas overseas, perhaps even to China. They stated that the US had too many regulators and environmentalists who had made up their minds to kill nuclear power, but that other countries had better prospects. Interestingly enough, nearly everyone I spoke to (and I talked to a lot of people during those years) told me that they personally supported nuclear power but were pretty confident that their view was a minority opinion. (Think about that for a while.)
I resisted the idea of going overseas, partially because I had no faith that I would be able to maintain any control of my concept somewhere else and partially because I really did not want to help other countries become more economically powerful than my own home. (I passionately believe that the Adams Engine(TM) represents a disruptively lower cost power production system than is available today and I also strongly believe that low cost power is a huge competitive advantage for many other important industries.)
Anyway – long introduction to an important issue that should be discussed in great length by the nuclear community. According to a June 1, 2007 article on energypublisher.com titled China’s nuclear tech exports there is a strong likelihood that “China is likely to export its variants of recently acquired nuclear technology to Pakistan and Iran.” As regular readers of Atomic Insights know, both Westinghouse and Areva have recently signed deals for major new projects in China that include agreements for technology transfer and local sourcing of key components.
That idea makes me nervous, not because I am all that concerned about Pakistan and Iran getting nuclear power technology, but because I would prefer for American companies that developed their technology with a lot of assistance from the US taxpayers to obtain the marketing win and pay US income tax on the proceeds of the sale. I am also quite concerned that those will not be the only markets where Chinese companies, taught by American technicians and engineers, make inroads into markets in direct competition with their teachers. (Of course, neither Westinghouse nor Areva are “American” companies, but they both have strong presence in the US and they both have subsidiaries that have been beneficiaries of US DOE grants and US DOD contracts for many decades.)
As many people in a lot of industries (plastics, steel, textiles, electronics, entertainment) know, Chinese businesses do not have much respect for intellectual property laws and they do not feel constrained to provide health care, adequate wages, or even freedom of expression for their people. What most people forget is that most Chinese businesses are still majority owned by the Chinese government and that most joint ventures in the country require that the majority interest is held by a Chinese company.
I know that the audience for this blog is a world audience and that my comments might sound quite jingoistic, but darn it, the USA is a great country full of great, hard working people who like to buy things from all over the world. In order for us to keep doing that, we need to sell quality products outside of the country so that we can earn the money that we like to spend. The alternative is for us to continue borrowing until . . .
Of course, there is also the issue that continuing to enrich the leaders of the Communist Party in China is not exactly the best path to peace and stability around the world.