Commentary: Does China offer an example in jobs creation?

In their campaign for U.S. Senate, Republican challenger Carly Fiorina and Democratic incumbent Barbara Boxer argue over all the hot-button issues: abortion, stem cell research, gun laws, same-sex marriage.

But perhaps the most relevant issue involves China, and all that it symbolizes. Not China the military power, but China the economic giant and jobs magnet.

Fiorina has a soft spot for China. When she worked as an executive for Hewlett-Packard and earlier for the telecommunications firm Lucent Technologies, she opened plants and "right-shored" manufacturing jobs in the People's Republic of China.

"China has done wonderful things to create jobs," Fiorina told reporters after last week's debate at Saint Mary's College in Moraga.

Boxer's view is very different, as she described in a visit to The Bee's editorial board on the day after the debate. "I've been there," Boxer said. "You should see the workers, how they live, and the government bureaucrats live high on the hog – a little bit like CEOs."

Like Jerry Brown running against billionaire Meg Whitman, Boxer is convinced that in this recession, when 2.25 million Californians are out of work, voters will shun anyone who wears the Scarlet Letters of CEO, particularly one with a record of firing workers.

In last week's debate, you would have needed your fingers, your toes and maybe those of a friend to tally the number of times Boxer homed in on her central line of attack, slamming Fiorina for sending "jobs to China," "shipping jobs overseas," "stamping 'Made in China' " on her companies' wares.

"China is a command-and-control dictatorship. I'm not interested in being like China," Boxer told The Bee's editorial board.

At every opportunity, Boxer tells voters that under Fiorina, Hewlett-Packard shed 30,000 jobs.

Fiorina says that unlike career politician Boxer, she has had to make the tough choice to cut some jobs to "save" other jobs. Part of the job loss came when Fiorina completed the Hewlett-Packard merger with Compaq. She also was H-P's boss when the dot-com bubble burst.

We won't know until votes are counted whether her time as CEO helps or hurts. But for moneyed interests, her boardroom experience is her calling card.

The U.S. Chamber of Commerce is aiming to raise $75 million to take back the House and Senate, and likely will start spending heavily on television ads in the coming days.

"The Fiorina-Boxer campaign is extremely important to the U.S. Chamber of Commerce," said William C. Miller Jr., the chamber executive who oversees the political operation and sees Boxer, one of organized labor's most loyal votes, as particularly nettlesome.

"We can wring our hands about why jobs are leaving," added Miller. "But businesses go where they can compete. What Carly Fiorina talks about is that we need to fight for every job and lift the burdens on American companies."

As she answered questions after the Wednesday debate, Fiorina praises China's Special Economic Zones, free-market areas within the communist country where the regime eases taxes and any other laws to foster development.

The most notable is Shenzhen, a fishing village in the 1970s that has been transformed into a metropolis of more than 8.6 million people, and is home to factories owned by multinational corporations.

It's hard to imagine a Shenzhen being created anywhere in the United States. But Fiorina urged creation of special zones in the United States where the federal government would grant tax breaks and "use the power of the federal government to cut through regulation" to aid businesses willing to provide jobs. "China rewards innovation better than we do," Fiorina said.

Innovation is one way to describe it.

UC Berkeley professor Harley Shaiken, an expert on labor and globalization, noted that manufacturing wages in China are 10 percent or 15 percent of what they are in the United States. And Chinese workers lack the basic right to strike. "It is an act of heroism, not a right," Shaiken said of union organizing.

Certainly, there would be no Silicon Valley without China and other countries where labor is cheap and where environmental restrictions are lax, if they exist at all. But special economic zones that work well for China would not translate in the United States.

"They wouldn't work to the same extent here," said Professor Tomas Gomez-Arias, director of the Center for the Regional Economy at Saint Mary's College. "We are a much freer economy. The labor market is much freer in America. As much as we can complain about taxation, we are in a much better situation here."

Fiorina's vision for special zones has a familiar ring. California lawmakers have created 42 "enterprise zones," with the goal of spurring job growth in depressed areas.

Businesses locating in the zones get state tax breaks amounting to $500 million a year. They're supposed to hire, and some do. But many jobs go to low-wage food service and retail workers. And some of the zones are in areas that hardly need the help, like San Francisco's bustling South of Market area.

Worse, they don't work. The nonpartisan Legislative Analyst's Office recommends their abolition "because they are expensive and not strongly effective."

Fiorina's admiration for the ways of China is ironic. She decries regulation and high taxes imposed by Washington. In her view, a strong central government here is bad. But she extols China's highly centralized government, which can require aggressive policies to create factories, no matter the obstacle.

Boxer, the darling of organized labor and a skeptic on free trade agreements, offers big promises, too. She says she envisions a return to the day when products have "Made in America" stamped on them. Her vision – and that of many Democrats – is that California will be the hub of a whole new industry, green technology.

That's a nice idea. No doubt, California's big thinkers will imagine much of the new clean energy technology. But in this flat world, once they develop the next new thing, they will in all likelihood send it to China, where it will be pieced together by workers earning 10 percent of their American counterparts, at least those who have jobs.