Sorry, Pittsburgh. Your days as the capital of America’s steel industry are long gone. When California needed 45,000 tons of steel to reinforce San Francisco’s Bay Bridge — a cousin of the iconic Golden Gate — penny-pinching Sacramento politicians turned to a Shanghai company that shipped the metal across the Pacific on low-cost barges.
These days, it’s a common story.
Americans are increasingly turning to Chinese contractors to build large-scale construction projects in the United States. In 2010, the China Daily reports, Chinese companies signed over $1 billion worth of new deals in America. That includes projects like Manhattan subway stations and the huge new Revel Casino in Atlantic City.
The reason? Cost.
The Bay Bridge was built alongside the Golden Gate in 1933 to connect San Francisco and Oakland. Now, it needs $6 billion in reinforcement against earthquakes. Shanghai Zhenhua Heavy Industries, owned by the Chinese government, was willing to help on the cheap.
The Chinese company provided the most competitive bid ($350 million) to replace some of the bridge’s most important features, including its main cable and its innovative single suspension tower, and won the contract.
Chinese steel is simply cheaper than the stuff American mills turn out. That may be because the Chinese government is helping to keep prices down artificially.
On Monday, President Barack Obama announced that he had filed a complaint with the World Trade Organization accusing China of giving $1 billion of illegal subsidies to its automobile and auto parts industry (the Chinese later hit back with a complaint of their own). Obama delivered the news during a campaign appearance in Ohio, a key battleground state, and one that relies on manufacturing industries like steel for employment. A happy accident, of course.
Obama’s challenger Mitt Romney has consistently hammered the president on trade policy with China, promising that he would take a harder line if elected.
Either way, thanks to a boom in oil and gas drilling and increased demand for automobiles, the steel industry in Ohio is making something of a comeback, according to the New York Times. Maybe when the Bay Bridge needs to be refurbished again in 2082, a mill in Cleveland will get the call.
Another price to pay?
And while it may be more attractively priced, Chinese steel is also significantly dirtier, according to a report on the environmental website China Dialogue. The U.S. steel industry recycles a good deal of old metal when it makes new steel and generally tries to reduce its carbon footprint. Chinese companies abide by few environmentally friendly practices, as the piece explains.
Maybe that’s why China now make eight times as much steel as the U.S.
California could care less about global warming or environmental pollution. “I am not aware of any environmental component to the pre-award audit,” a spokesman for the state’s Department of Transportation told China Dialogue.
We’re not sure the bureaucrats are losing too much sleep over the fact that, as one expert said to the site, “We’re putting developing populations at more risk for asthma, for ingestion of heavy metals, for all of the things that come out of the stack of a steel plant.”
They’re probably more concerned that Shanghai Shenhua was more than a year late with the most recent components of the bridge, possibly delaying its scheduled opening in 2013.