China syndromeChina’s growing role in U.S. infrastructure building, maintenance

Published 30 August 2012

The building and maintenance of heavy infrastructure in the United States, which includes road, mass transit, marine, and building construction, is worth $44.1 billion per year and $12 billion in annual wages; bridge and tunnel construction is worth an estimated $24 billion in revenue and $4.3 billion in wages; many wonder why, in this difficult times, states and municipalities hire Chinese companies for many of these infrastructure projects

With the recession, lack of jobs, and increase in unemployment in recent years, people and organizations have pushed more and more to keep jobs in the United States, which is why many are irate at the news of the U.S. government outsourcing large infrastructure projects to Chinese firms.

According to an ABC News report, three projects standout. A $400 million bridge renovation in New York, a $7.2 billion bay bridge which will be built to connect San Francisco and Oakland, and a proposed $190 million project in Alaska. reports that some see the bay bridge as an especially egregious case, as California officials turned down federal funding for a major part of the project in order to bypass federal restrictions and hire a firm in China. The cost of the decision: 3,000 U. S. jobs and a billion dollars for the Californian economy.

The trade group Alliance for American Manufacturing (AAM) started a campaign to block Chinese firms from U.S. infrastructure projects. Scott Paul, the executive director of AAM wants the people who live in this country to have a hand in building it.

“There is a capacity to do this work in the United States,” and “We need to make sure that our federal laws and our state laws give an appropriate preference to domestic firms for large-scale infrastructure projects,” Paul told Industry Week.

A state official tried to defend California’s decision to outsource the making of the bridge, saying that most of the bridge will still be made in America and that, in any case, U.S. companies would not have been able to complete the work that was let out to China on time, in part due to a shortage of welders. 

The Chinese firm that was hired, Shanghai Zhenhua, fabricated the main steel beams of the bridge then shipped then to San Francisco (read more about the Made-in-China bridge in this New York Times report).

The construction and “hard” infrastructure business represents hundreds of billions of dollars in revenue and millions of jobs. According to IBISWorld, the construction of roads, mass transit, marine, and buildings is worth $44.1 billion per year and $12 billion in yearly wages. Bridge and tunnel construction alone is worth about $24 billion in revenue and $4.3 billion in wages.

With so much money involved, it is no surprise that the U.S. market for infrastructure is very competitive and highly regulated. U.S. companies that operate in these fields are understandably sensitive about the threat of outside competition. The one factor that U.S. industry has on its side is the amount of funds which are allocated to infrastructure development by local governments.

The combination of a slow economy, unemployment, and high public spending leads many to wonder why would states which spend all this money, would not spend it here? notes that U.S. companies which are getting beat out of these jobs are not waiting around either, as they are fighting for projects in other countries.