California’s ‘Chinese Dream’

After California Governor Jerry Brown led a delegation to China earlier this month in a effort to stimulate economic interaction – and especially Chinese FDI in , Truman National Security Project fellow Dean Fealk outlines California’s “Chinese Dream”, and compares the political hurdles that Chinese firms have experienced in the U.S. with California’s relatively open stance. From The Atlantic:

[…C]ommerce rarely flows shorn of politics and it has become a familiar story that Chinese investment in the U.S. is met with skepticism and sometimes hostility by Washington on a variety of grounds, ranging from intellectual property protection, to rule of law transgressions, to national security concerns. Few can forget CNOOCs 2005 ill-fated bid for Unocal that was effectively shut down by Congressional grandstanding.

But California is not Washington. Governor Brown clearly announced to his Chinese hosts that “We’re not interested in politics. We’re interested in business.” This declaration resonated clearly with the delegation zipping along more than 200 mph along high speed rail from Beijing to Shanghai as Governor Brown sought investors to bring a similar rail project to the Golden State from Los Angeles to San Francisco.

Admittedly, there are aspects of diplomacy that only the federal government is well-equipped to handle. Issues of national security flowing from military considerations or treaty alliances will always be the proper purview of the federal government. But perhaps there is an emerging division of labor such that economic diplomacy should not solely be a function of the federal government, particularly in times of partisan polarization in Washington (that can easily spill over into xenophobia).

Meanwhile, the website for the upcoming California Economic Summit has a recent post declaring Governor Brown’s mission to China “a home run”:

Governor recently led the delegation of Californians to China. Kish Rajan, Director of the Governor’s Office of Business and Economic Development, took part and believes the trip can be successfully measured in three ways.

First and most importantly, for the first time in 10 years, California opened–or re-opened–the California-China Trade and Investment office in Shanghai. In 2003, the office was closed down. Since then, business leaders and economic developers have been urging for it to return.

[…]Rajan’s second measure of success: relationships that were formed with each of the members of the delegation and Chinese investors.

[…]The last, but certainly not the least, measure of success comes on the policy front. Governor Brown made it a top priority to address climate change.

For more on the economic relationship between California and China and the case for encouraging more California-bound Chinese FDI, see a study by the Rhodium Group. For an overview of the political barriers to Chinese FDI in the U.S., listen to the Caixin podcast  “Chinese FDI in the U.S.: Separating Politics from Reality“. Also see prior CDT coverage of California and foreign direct investment.

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