On Monday, August 20, the new Consul General of China in San Francisco, Ambassador Wang Donghua, visited the California Chamber of Commerce.
Joining CalChamber President and CEO Allan Zaremberg in welcoming the new Consul General were Susanne T. Stirling, CalChamber vice president of international affairs, and CalChamber Board Members Mark Jansen, Blue Diamond Growers and CalChamber Council for International Trade chair, and Margaret Wong, McWong International, Inc.
The delegation from the Chinese Consulate, which also included Deputy Consul General Ren Faqiang and Consul Jin Wei, welcomed the continued partnership with the CalChamber under the new Consul General’s leadership.
Topics included the importance of trade between California and China, and the current trade dispute with tariffs. All agreed on the importance of a process for resolution to be established prior to the upcoming midterm U.S. elections.
There also was agreement that raising tariffs results in higher prices to the consumer for the specific product protected and in limited choices of products for consumers. Further, raising tariffs can cause a net loss of jobs in related industries, retaliation by U.S. and California trading partners, and violates the spirit of our trade agreements.
Trade with China
U.S.-China trade has risen rapidly over the past several decades. Total trade in goods between the two nations has increased from $4.8 billion in 1980 to $635.96 billion in 2017. U.S. exports to China in 2017 were approximately $130.37 billion.
In 2017, China continued as California’s third largest export destination, with approximately $16.4 billion in exports. Computer and electronic products accounted for 26.6% of exports, totaling $4.36 billion. Transportation equipment brought in $2.55 billion with 15.5% and non-electrical machinery brought in $2 billion, accounting for 12.5%. This was followed by waste and scrap with $1.7 billion and 10.4% (U.S. Department of Commerce).
Foreign Direct Investment
China was the third fastest-growing source of total foreign direct investment (FDI) stock in the United States in 2016, investing $58 billion in the U.S. U.S. FDI into China totaled $92 billion in 2016. Chinese FDI into the U.S. supported 43,800 jobs and contributed $3.5 billion to expanding U.S. exports and another $545 million to research and development. The top industry sectors of Chinese FDI are software and information technology (IT) services, electronic components, communications, industrial machinery, business services, and auto components. (Select USA)
FDI based on balance of payments and direct investment position from China into the U.S. totaled $39.5 billion in 2017, and FDI from the U.S. into China totaled $107.5 billion in the same year (Bureau of Economic Analysis).
In Southern California, the No. 8 country for FDI through foreign-owned enterprises (FOEs) is China. Chinese FOEs in Southern California provide almost 16,000 jobs through more than 450 firms. This amounts to $990 million in wages. The top sectors of Chinese FOEs are professional and business services, information, transportation warehousing and utilities, manufacturing, and wholesale trade. (Los Angeles Business Journal, V. 40 No. 21, 2018)
The CalChamber supports expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.