NOVEMBER 2011

To create jobs, America can learn from China

“America needs to learn from the example for future growth and long-term sustainability being set by China, and build the infrastructure and invest in the education and development of talent in growth industries, such as renewable energy and electronics, to achieve long-term growth and the continuation of the whole American experience,” according to Dr. Stephen Leeb, a recognized authority on finance, investing and economic trends. Leeb spoke with Peter Clayton, producer and host of TotalPicture Radio.

However, the picture Dr. Leeb painted in his interview was troubling. China is gaining ground as a superpower and attaining competitive advantage over other developed countries, especially the United States, by using its profits to globally invest in and control mineral commodities such as coal, oil, zinc, silver and gold. In his latest book, Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, Leeb argues that access to rare earth resources will determine the standard of living for future generations.

Leeb discussed how “United States officials and politicians engage in short-term myopic planning, endless legal maneuvering, scandals and wartime investing that are crippling America’s economic viability.” Contrast this with China’s government, led by politicians with backgrounds in hard sciences. “China is spending enormous amounts of money planning for, and analyzing, the long-term consequences of global warming,” Leeb asserted. “The Chinese, I don't think, hate Americans, by no means, but the Chinese are all for China. They would like to come off as the heroes in the environmental revolution.”

“There’s a war going on out there in the world between the two most important economic powers: the United States and China. We don’t know we’re fighting a war. We are,” said Leeb. “Our country needs to start looking forward to our future and how we can win this war and continue to prosper. However, it’s going to be virtually impossible to build out a new renewable energy society or create new energies, whether they call them renewable or not, without having access to rare earth. Right now, we don’t.”

Leeb views China’s accumulation of rare earth assets as proof of the country’s growing strength. “China almost has a hammerlock on two premier renewable energy markets – wind and solar,” said Leeb. “Their control and refining of the heavy rare earth elements, which are essential for building magnets that go into wind turbines, hybrid automobiles and military equipment, clearly demonstrates China’s ever-increasing lead in the global environmental revolution.”

“You know, the benefit of this is just as in China: if we do wake up to this, we will create a number of very big growth industries in this country – huge growth industries with great jobs,” Leeb concluded.