China and California have been taking concrete steps to deepen economic cooperation and enhance communication across a variety of settings. The result has been increasing optimism and an improving outlook for future collaborations between the world's fastest-growing economy and the Golden State.

The measures, including frequent bilateral governmental exchanges and people-to-people collaborations, are already bearing fruit. Dialogues are underway in both public and private sectors, as big-ticket deals are clinched throughout a broad spectrum of industries, from computer science and clean energy to pharmaceuticals and hybrid cars.

"California has a relationship with China that no other US state has," said Kish Rajan, director of the California Governor's Office of Business & Economic Development. "We not only have ties with commercial objectives, but with academic and cultural ones as well."

California's third largest trading partner, China imported $14 billion of merchandise from California last year, 28 percent of which was computer and electronic products totaling about $3.9 billion, according to the Ministry of Commerce.

And, one third of Chinese exports to the US ended up in or passed through California, enabling the state to serve as a gateway, said Vice-Minister of Commerce Wang Chao.

"California benefits from its exports of technology and agriculture, as well as consumer products to China," said Darlene Bryant, executive director of ChinaSF, which promotes business exchanges between China and the San Francisco Bay Area.

During a visit to Beijing on April 9, California Governor Jerry Brown signed what he called a "landmark agreement" with Chinese Minister of Commerce Gao Hucheng. The memorandum of understanding formed a joint working group that includes California, the Ministry of Commerce and six Chinese provinces, autonomous regions and municipalities - Jiangsu, Inner Mongolia, Shanghai, Shandong, Guangdong and Chongqing.

The working group came out of conversations between Brown and then Vice-President Xi Jinping when he visited Los Angeles in February 2012 and is expected to enhance cooperation through the regular exchange of information, annual seminars on trade and investment cooperation, trade missions and fostering strategic relationships between Californian cities and China.

"While California seems relatively small compared to the vastness of China," Brown said, "the innovation, the creativity of Silicon Valley, our medical advances, the Internet and various other technologies make California, I believe, a very valued partner for China. I see today as just another step in a long history of increasing mutual understanding and collaboration."

The agreement names nine key sectors that California and China can work together on: infrastructure, biotechnology, IT, agriculture, energy, manufacturing, tourism, environmental protection and exhibitions.

Rajin was on the trade delegation with Brown in April. He said he saw firsthand how "China is undergoing a tremendous national transformation right now. Major sectors like energy, transportation, and food are all changing in profound and dynamic ways".

However, those changes pose challenges that need innovative solutions, he added. California is the center of innovation - from technology to renewables to agriculture - and working cooperatively to address those challenges in China presents an opportunity to not just address some of these issues but provide leadership internationally, said Rajan.

China is also seen as an emerging source of foreign direct investment to the US. In October, the Asian Society released a report on China's direct investment in California since 2000. The majority of China's $1.3 billion investment there was in IT, computer technology and entertainment industries.

Analysts from Rhodium Group, a New York-based research firm, predict that California has the potential to draw $10 billion to $60 billion of direct investment from China by 2020.

Junechang@chinadailyusa.com

(China Daily USA 06/06/2013 page8)