News Column

Jerry Brown Heads to China to Get 'Billions' in Investment

April 8, 2013
Jerry Brown

In 1977, during a visit to Japan when he was governor before, Gov. Jerry Brown suggested a side trip to China and hastily made arrangements before abandoning the idea.

"I think it's too jet-setty," Brown told Orville Schell, who was traveling with the governor and included the exchange in the 1978 book "Brown." "I think such a fast trip to China would be too flaky, and I've got to watch that."

Thirty-six years later, Brown has found more time, and China is eager to accommodate him.

In his first official trip abroad since taking office in 2011, Brown leaves for China on Monday to promote California exports, tourism and greenhouse gas reduction policies, and to open a foreign trade office in Shanghai.

"I think we're going to get billions of dollars in investment coming from China," Brown said last week. "We're also going to facilitate billions of dollars in additional exports, not overnight, but over time."

Brown has been planning the trip for more than a year.

In late 2011, he consulted privately on the matter with Schell, business strategist Peter Schwartz and e-commerce tycoon Jack Ma, one of China's richest men.

Over dinner at Schwartz's home, Brown expressed his interest in raising Chinese capital for a range of projects in California, including public infrastructure.

Brown's dinner companions were encouraging. Schwartz and Schell, director of the Center on U.S.-China Relations at the Asia Society in New York, suggested Brown invite China's then-president-in-waiting, Xi Jinping, to California.

The politicians met in Los Angeles in February 2012, and Brown announced his trade mission the following week.

He will be joined by a handful of advisers and about 75 business delegates. His schedule includes seven days of lunches, forums and signings of government-to-government agreements in Beijing, Nanjing, Shanghai, Guangzhou and Shenzhen.

Brown's predecessor, Gov. Arnold Schwarzenegger, visited China in 2010, but the state has not had an official presence there since California closed its 12 foreign trade offices amid controversy in 2003.

At the time, the Legislative Analyst's Office and other critics questioned the effectiveness and cost of California's trade offices. The one outpost that remained open for several years on private donations, in tiny Armenia, was widely mocked as less than significant.

The China office Brown will open in Shanghai will be financed by private donations, the Brown administration said. It will be operated by the Bay Area Council, a business group, but it will carry the state's imprimatur, representing a return for California to the state-managed promotion of foreign trade.

"There are, you know, more formal protocol expectations in foreign countries than there are in the United States," said Allan Zaremberg, president of the California Chamber of Commerce. "Having the ability to respect their economy and government by putting an office there is part of the protocol that leads to better relationships."

'Big-ticket deals' sought

China is California's third-largest trading partner, behind Mexico and Canada. California's merchandise export trade with China amounted to about $14 billion last year, and China is an emerging -- if relatively small -- source of foreign direct investment in the United States.

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