A new business alliance was launched in San Francisco on Thursday in response to growing investment interest from Chinese business, especially in small and medium enterprises, in the US.

It was initiated by the Chinese Consulate General in San Francisco in collaboration with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), with the goal of facilitating investment in Northern California.

"The alliance is absolutely necessary to cultivate the growing interest of Chinese investments in the US," said Consul General Luo Linquan, at a ceremony at the consulate in San Francisco.

In 2015, bilateral trade between China and the US reached $558.4 billion, making China the largest trading partner with the US, surpassing its neighbor Canada, according to Luo.

Over the last two decades, Chinese investments in the US have become more diverse. Aside from state-owned companies, small and medium Chinese firms begin to test waters in the US market, he told the guests at the ceremony.

Luo added that the new alliance was expected to offer an outstanding platform for Chinese small and medium businesses in the US as it will provide essential services, including legal, taxation and intellectual properties consulting.

Luo said that in order to achieve sustainable bilateral growth, the alliance also should offer a guideline for the operation of Chinese businesses in the US. The Chinese consulate will continue to support the development of Chinese businesses organizations in the US, Luo said.

Chinese outbound FDI has grown exponentially since the early 2000s. The annual net acquisition of FDI assets in the balance of payments surged from less than $20 billion before 2006 to almost $190 billion in 2015, according to a recent report on China's FDI by Rhodium Group.

California has been a hot spot for Chinese investment. Last year, Chinese companies invested a total of $3.3 billion in real estate, information technology, biotechnology and other areas, which represents a 22 percent increase over the previous year, according to data provided by the Chinese consulate in San Francisco.

Natosha Safo, the business development manager of the city of San Francisco, said the city values its partnership with China greatly. In 2006, San Francisco created an economic initiative, ChinaSF, working with Chinese business both inbound and outbound. Over the last 10 years, ChinaSF has brought in more than $1.5 million of FDI into San Francisco.

Congjiang Wang contributed to this story.

liazhu@chinadailyusa.com