China Herald: What can Detroit learn from China?

Can Detroit learn from the way China pulled its economy out of misery, wonders lecturer Michael Justin Lee in ChinaUSFocus. "There actually was no great secret to the success of China’s SEZs. The government butts out to incent private capital in. That’s pretty much it."

Michael Justin Lee:

There actually was no great secret to the success of China’s [Special Economic Zones or] SEZs. The government butts out to incent private capital in. That’s pretty much it. Of course, government butting out includes lowering or even better, eliminating, taxes so Mr. Orr must expect a barrage of artillery fire. But without tax advantaging, no one would plant new capital now in Detroit. And without that new capital, even a Federal lifeline would be no more than a band-aid measure. Detroit has nothing to lose in trying. Unfortunately, this is not just a figure of speech.

Detroit, in fact, has literally nothing left to lose. But with all due respect to those eminent economists Lennon and McCartney, just because something can’t get no worse is no reason why it must get better. Detroit might stay down permanently if something drastic is not enacted.

In exchange for bankruptcy protection from creditors, Mr. Orr should offer the creation of the Detroit Special Economic Zone, the whole free market shebang. Come one, come all, just like in Shenzhen. Detroit gives nothing but full opportunity. But that’s enough. You make a buck in the Detroit Special Economic Zone, you keep it all. That’s a mighty fine incentive for someone to consider making a first investment or hiring a first employee in Detroit.

Deng Xiaoping could not have enacted his magnificent capitalist experiment until the situation in China was as bleak as Aragorn’s in the Lord of the Rings. Mr. Orr has the same “golden opportunity.” Detroit’s ruinous former mayors Coleman Young and Kwame Kilpatrick would never have considered this route. But paradoxically, precisely because of the tragic legacy that those two men left behind, in a few years Detroit could be the very model for emulation for the rest of metropolitan America.

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Michael Justin Lee is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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