The Snowball Effect: Chinese Investment in Small Town America
In the media there is a seemingly cold tone between the US and China. Behind the scenes on the other hand, large trade agreements between the two countries are being formed, particularly concerning investment in energy resources. On November, 2017, Trump traveled to Beijing to discuss trade agreements between the two countries. China Energy, the largest energy company in the world, agreed to invest $250 billion into gas and power in the US, with almost a third of it ($83.7 billion) being invested into the state of West Virginia. This investment was the largest investment in the history of West Virginia and is expected to help bolster the economy of one of the poorest states in the country.
This deal led to international attention from other investors who were eager to take advantage of the new access to natural gas. Rockwool, a Danish company with branches in many countries across the globe, saw this opportunity and chose to expand their second factory in the US to the small city of Ranson, West Virginia. This investment is needed in order to motivate the demand for natural gas in the area and further support the deal with China. From the outside, this deal appears to be a perfectly polished plan with major economic benefits for everyone involved, nonetheless for the inhabitants of the small town. There was a promise made of 150 new jobs for the residents with positions ranging from production to management. This seems to be a major boost to the small economy that is specialized in arts and recreation.
Nestled in the foothills of the Appalachian mountains, much of the area relies on tourism, which brings in large amounts of revenue with rafting companies attracting many tourists from the DC region. This brings in a boost to the local economy of around $1 billion annually. So what would happen to all of this revenue if the nearby rivers and nature became polluted? Tourists are unlikely to commute to an area to go rafting down a polluted river.
The city of Ranson, with a population of less than 5,000, is already doing much better economically than the rest of West Virginia, so this “boost” to the local economy from the new factory would most likely do more harm than good. Housing value is expected to plummet after the smokestacks are introduced. The location of the new Rockwool factory will be on the grounds of an old orchard. When the orchard land went up for sale, David Hamill, the mayor at the time, created a plan for what to do with the land. This involved the expansion and diversification of the city by building more schools, houses, parks, churches, a train station, and office space. If you look back at the Rockwool promise of 150 new jobs for the people, this is meak in comparison to the original deal for the land. The land use plan that Mayor Hamill was proposing would create almost 8,000 new jobs for the residents, which would also create a broader base for the economy that would attract more tourists to the area which already relies much of its economy on tourism. The plan had already been approved and was being initiated. Then, just like in a movie, the mayor died. A few months later, Rockwool proposed to buy the land and the new mayor accepted. The new plan for the town was to build the Rockwool factory.
The whole operation of the planning and ordinances of the Rockwool factory were kept under hush, away from the view and critique of the public. Regulations in the law were changed to support the building of the factory. The smokestacks are expected to be 21 stories high, which was in violation of the law until it was changed specifically for Rockwool. The emissions declaration for the plant were not put out until the day before Thanksgiving, making it easy for the public to overlook.
So far, we have barely even touched on the environmental impact of this plant, which is perhaps the largest impact of all. The location of this plant plays a major role. It is in the school zone of an elementary school and also within close proximity of a few other preschools and primary schools. The list of carcinogens that are being put into the air from the tall smokestacks is immense. The health implications of the plant would affect everybody in the region, further harming an already strained healthcare system. It would pollute the rivers impacting the tourism economy, and much more. The EU is even considering taking a look into the health impacts of mineral wool- the insulation that Rockwool manufactures.
Chinese investments have been in the news recently, especially in regards to the large investments being made to many parts of Africa. The Chinese economy and population is growing at a rapid rate and the country needs energy suppliers in order to sustain this growth. By investing in a poor state in the US, they now have access to a new source of cheap energy. The impacts of Chinese investments go beyond what is seen at the surface level and reverberate to impact many people in different ways. It is clear that everyone involved in the deal did not have the interests of the local population at heart.