Pittsburgh's mills slipped into decline in the mid-1980s, decimating the local economy

No city is more closely linked to the history of American industry than Pittsburgh.

Detroit spawned an industry that dominated the world motor trade.

Manhattan built the skyscrapers from where banks fuelled the global economy.

The industry is even credited with having been the decisive factor in winning World War II.

Today, it is almost all gone.

The modern global steel industry is dominated by China, which produces four times more steel than any country in the world in its breakneck rush to accelerate development.

Pittsburgh's mills slipped into decline in the mid-1980s as foreign competition took its toll, leaving thousands of families of steelworkers desperately trying to retrain in a modern United States where light manufacturing and service industries dominated.

'Accepting reality'

Novosel says the US can no longer challenge China economically

Now, 20 years later, their lives have moved on.

But walking down the empty streets of Homestead, a suburb of Pittsburgh, they tell me they are concerned that the modern US has given away too much of its economic might.

"We're not in a position to challenge countries like China economically," says Tony Novosel, now a professor of history at a local university.

"How would we challenge them? We cannot cut off their money. So, whoever becomes president is going to have to accept the reality that we aren't going to be the pre-eminent financial powerhouse, that we are going to have to work with the European Union, with China," he says.

In the light of the financial crisis that has hit Wall Street in the past two weeks, those are haunting words.

And in this presidential race the economy may be the deciding factor, as many Americans prepare for a looming recession.

Edge 'slipping'

The imbalance of trade is now more than $250 billion in China's favour and with that enormous reserve of foreign currency, China has been buying US treasury bonds to the tune of $1.5 trillion.

Under the shadow of a former steel furnace, preserved as a memorial to Pittsburgh's former industrial glories, trains roll over the Monongahela River dragging containers carrying Chinese-manufactured goods, destined for the shopping malls that sprang up on the sites of the old mills.

But in the last few years, it is not just cheap, mass-manufactured goods that have been coming across the Pacific, and many people are concerned that the technological edge which kept US companies in the driving seat of the trade relationship has slipped too.

"We used to say 'it doesn't matter if they make the textiles – we'll do the hi-tech stuff'," says Patrick Mulloy, a US-China trade commissioner.

"But when you lose the manufacturing capacity, the [research and development] flows with it. 

"They [China] have strategy to move up the food chain and to get to these higher value-added jobs, and they're incentivising our corporations to help them do it."

Local concern

The evidence for that is all too clear.

Lenovo now owns IBM's personal computing division, most Apple-branded products are made in China and science parks around Beijing and Shanghai are full of American brand names that have moved their research centres overseas.

On the election trail, both candidates speak passionately about the need to kick-start the US's manufacturing base and bring back jobs that have drifted abroad.

But it is hard to see how they will tackle the reality of a global market in which American companies now have great difficulty competing.

"I am concerned. What's gonna happen? It's happening so quickly," says Ed Salaj, one of Pittsburgh's former steel workers.

"I put 20 years in and things weren't all that bad. My father put 30 years in, and he had benefits and all that. 

"And this is the result," he says, as he motions to the empty streets that once hummed with an industry that was the envy of the world.