OM in the News: China’s Newest Exports–Bridges for California and Workers for the Bahamas

China’s role as an exporter is not exactly a news item, but two articles caught my eye this week that are worth discussing in your OM class. In the first, The New York Times (June 26, 2011) tells of how California decided to by-pass the U.S. “Buy American” program to have the new San Francisco-Oakland Bay Bridge built in China and shipped here in massive pieces. The Times writes: “The project is part of China’s continual move up the global economic value chain–from cheap toys to Apple iPads to commercials jets–as it aims to become the world’s civil engineer”.  Based on the reputation of showcase projects like the Beijing Olympic-sized airport terminal and the mammoth hydroelectric Three Gorges Dam, Chinese companies have been hired to build copper mines in the Congo, high-speed rail lines in Brazil, and huge apartment complexes in Saudi Arabia.

So it shouldn’t have come as a big surprise to find out that China is about to build the largest resort in the Caribbean, in Nassau, Bahamas, to challenge the huge Atlantis Hotel head-on. The surprise, however, was the uniformly negative  reaction from every Bahamian I met, 3 weeks ago while on vacation, to the project’s construction. The Miami Herald’s report  that China would be sending 5,000 of its own workers to build the $3.4 billion, 2,250 room Baha Mar hotel and casino resort did not please locals –or the U.S. government. Hotel execs are cognizant of the negative message they will send to tourists, as well as the Bahamian citizens, by maintaining a work camp for thousands of Chinese laborers in a highly visible and affluent section of town. But the Chinese government insisted on Chinese workers– or there would be no financing. The Bahamas wanted another tourist draw and reluctantly agreed.

Discussion questions:

1. “He who has the gold, makes the rules” seems to apply in the hotel case. Do students agree?

2. Why did California opt for a Chinese bridge?