The Middle Kingdom confronts an economic transformation much like Pittsburgh did 30 years ago
January 18, 2014 9:42 PM
By Louis Schwartz
The same tectonic global shifts that upended Pittsburgh’s economy and social fabric beginning in the 1970s also contributed to China’s historic transformation from a poor, predominately agrarian society to the world’s second largest economy. So it is fitting that the reinvention of Pittsburgh from an environmentally degraded steel town in economic disarray to a diverse economy powered by health care, education, energy, financial services and high technology should serve as a reference point for the Chinese as they embark on their own difficult economic transformation.
Thirty years ago, Pittsburgh was reeling from the steady decline of its traditional manufacturing base, which was unable to stay competitive with then emerging economies, particularly in East Asia. And China also was reeling: from the “chaos” of the Cultural Revolution and decades of political, social and economic isolation. Both Pittsburgh and Beijing went about the task, which was often painful and certainly painstaking, of redefining themselves.
In Pittsburgh’s case the promise of change was summed up in “Strategy 21: Pittsburgh Economic Development Strategy,” which was formulated in 1985 by the city of Pittsburgh, its foundations, civic organizations and educational institutions, notably the University of Pittsburgh and Carnegie Mellon University. For China, the strategy formulated and pursued by the “chief architect,” Deng Xiaoping, which transformed China in one generation, was summed up by the simple moniker, “reform and opening up.”
As the implementation of Strategy 21 progressed, albeit in fits and starts, Pittsburgh gradually became a new city: cleaner, more diverse economically and increasingly reliant on education and innovation as engines of growth. At the same time, China leveraged its competitive advantage in having a huge low-wage labor force, to embark on an historic sprint to middle-income status. Over this period, the ties between Pittsburgh and China have grown and diversified, manifested in the numerous investments made by Pittsburgh companies in China, the steady flow of cultural, governmental and civic exchanges and the influx of a sizeable contingent of Chinese students who are studying at our colleges and universities.
Now, in the early days of 2014, Pittsburgh has sworn in a new mayor who embodies the impressive transformation Pittsburgh has made, while China appears to be conscientiously facing many of the same challenges that Pittsburgh encountered in the 1970s and 1980s: declining competitiveness in labor-intensive industries, a slowing rate of economic growth, serious environmental degradation and, frankly, a loss of direction. So it is not surprising that our paths are once again converging.
The good news is that that convergence is providing myriad opportunities for both Beijing and Pittsburgh. That Mayor Bill Peduto’s executive team includes a Mandarin-speaking native Pittsburgher who has significant experience working on sustainability projects underscores how the “new Pittsburgh” also is poised to provide the wealth of expertise accumulated during our transition, even as Pittsburgh consolidates and accelerates its own development.
The conditions now are very favorable for Pittsburgh to provide China with a vast array of expertise, ranging from energy-efficiency programs and nontraditional energy development to environmental remediation, brownfield reuse and health-care modernization, as Beijing begins to address the strikingly similar challenges that Pittsburgh faced 30 years ago.
So, when I recently was interviewed by a U.S.-based reporter for People’s Daily (considered the most authoritative voice of China’s central government), I was not surprised by the topic: In which ways could Pittsburgh’s experience inform Beijing’s policymaking as it embarks on its own 21st-century development strategy — its transformation from an economic model that is now running its course to one more economically, environmentally and socially sustainable.
The resulting article (“America Moving Forward: Crisis Compelled Transformation,” Dec. 23), which was based on our interview, is a paean to both Pittsburgh’s success in transforming itself and to the strong ties that now bind China and Pittsburgh, ties that permit us to be a reference point for China as it maps out its next stage of development.
Louis Schwartz is president of China Strategies LLC, a Pittsburgh-based consultancy that assists Chinese and Western corporations, nonprofits and government entities with bilateral trade, investment and economic development projects. He also is on the faculty of the Asian Studies Center at the University of Pittsburgh, where he has taught courses on law and development in China.
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