Gov. Jerry Brown arrived in China on Tuesday, ready to promote California exports, tourism and greenhouse gas-reduction policies, and to open a foreign trade office in Shanghai. He’s joined by a handful of advisers and about 75 business delegates, including three from the central San Joaquin Valley: John Harris, a prominent west-side rancher who is Harris Farms CEO and chairman; Don Peracchi, another west-side grower who is chairman of the Westlands Water District board; and Pete Weber, a leader in California Forward and co-chairman of California Friends of the San Joaquin Valley.
This is the second in a series of reports from Weber recapping some of his impressions. To see Weber’s first report, click here:
The big event yesterday was the signing of the international Trade Agreement with the Chinese Ministry of Commerce. Everything in China occurs on a grand scale. Held in a huge auditorium, the event was attended by hundreds of Chinese officials and business people. Chinese Ministers spoke of plans to make investments in California over the next ten years that could range from $10 to $60 billion. U.S. companies are also making big investments in China. For example, the largest investment ever made by the Walt Disney company is occurring in Shanghai.
It’s instructive to see the level of commitment that has been made by the Bay Area and L.A. to attract some of that Chinese investment. The San Joaquin Valley has no comparable commitment. This is an issue for the Central California Economic Development Corporation to consider, recognizing that China, in my impression, is a high risk-high reward market. Part of the risk is that China will be traversing a perilous path in the next few years. They have high internal debt, low returns on invested capital, rising labor costs , serious income inequality, big environmental issues and a population that is demanding better quality of life and more freedoms (influenced significantly by the availability of information that the government is increasingly unable to constrain). How effectively they will be able to navigate this difficult terrain is yet to be determined.
After a reception at the embassy last night, We had a great dinner at Duck De Chine, a beautiful restaurant that supposedly serves the best Peking Duck in Beijing (I’m no expert, but it sure was good). Like so much of Beijing it’s very new (about two years old) and definitely targeted at the affluent.
The delegation is heading to Shanghai today – traveling by high speed rail. Unfortunately I won’t be taking that train cause I’m heading back to Fresno today for an important meeting on Friday. Perhaps John and Don will share their reaction to the train ride.