California Hosts U.S.-China Summit

There's significance behind the choice of California as the venue for the U.S.-China summit between presidents Barack Obama and Xi Jinping. The state is home to more than a third of the China-born population in the U.S., and Chinese-backed investment groups have been pouring billions of dollars into real estate property and private companies based in California. At the same time, exports of California goods to China are surging, and state leaders are bullish about capitalizing on new markets there.

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Chinese President Xi Jinping begins a two-day meeting with President Obama later today, near Palm Springs, Calif.. There's a good deal of significance behind the choice of California as the venue for this summit. The state is one of China's largest trading partners, and is also home to a recent boom in Chinese real estate investment.

NPR's Kirk Siegler reports.

KIRK SIEGLER, BYLINE: China sells well over $100 billion worth of goods in California every year. And California exports more services and products to China than any other U.S. state. Last year alone, it was $22 billion worth of sales in tech products, entertainment and food. In fact, this state is full of tales about Chinese investors carting around loads of cash.

CHRISTOPHER THORNBERG: There's stories out there - anecdotal, but stories nevertheless - of Chinese businessmen just sort of showing up at a nut farm, or a winery, and then putting down a briefcase of $100 bills and buying everything - just give it to me - and they put it in containers and ship it back.

SIEGLER: Economist Christopher Thornberg is with the LA-based Beacon Economics. Those shipping containers Thornberg mentioned aren't anecdotal. California's huge ports, and its easy access to Asian markets, is a big reason why trade with China is booming. And Thornberg says that's likely to continue as California's relationship with China becomes more like the U.S.'s relationship with say, Canada.

THORNBERG: It's tourism, it's imports and exports, it's investment.

SIEGLER: Billions of dollars of investment, in fact, by Chinese firms eager to buy up commercial real estate in cities like Los Angeles. Some of it has been high-profile - the Marriott Hotel downtown, the Sheraton in Universal City. But a lot more has been under the radar - an office park here, apartment complex there.

EDDY CHAO: We're really busy.

SIEGLER: Eddy Chao was at an Asian business mixer this week. The presidential summit was very much on the minds of attendees as they sipped gin and tonics, and pints of beer, at this tony bar in Beverly Hills. Chao handles real estate transactions for Chinese investors eager to get a foot in the U.S. market. He says they feel especially at home in Southern California.

CHAO: Because, you know, it's like they're back home, you know. You see all the stores, you see all the restaurants and all kinds of - you know, the authentic Chinese food, the signage, everything. I think that makes them feel much more comfortable.

SIEGLER: Much of this local real estate boom has been taking place in the suburbs east of downtown LA, home to tens of thousands of Chinese Americans. Chinese immigration to California is nothing new. But the Diaspora that began in earnest with the railroads, has gotten a shot in the arm lately. There's the real estate, the lure of Silicon Valley, and interest by Chinese families in California's universities.

Even as diplomatic relations have been a bit testy between the two countries, California politicians have seemed bullish for China business. In April, Gov. Jerry Brown opened the state's first foreign trade office in more than a decade, in Shanghai.

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GOV. JERRY BROWN: We want to invest in China; we want to sell to China; and we want China to sell to California. and invest in California.

SIEGLER: All of this boosterism hasn't been without some tensions - especially in Hollywood, over piracy issues. California politicians also routinely scorn China's environmental record. But it's the economic and cultural ties between China and California that will provide a backdrop for this summit; and the sunshine and palm trees, something Cindy Fan, vice provost of iinternational studies at UCLA, says is a good fit for President Xi's style.

CINDY FAN: Which is one that is more laid-back and less ceremonial. So I think it's very smart for President Obama to be really going with the flow, and pick a location in which Xi Jin Ping can also continue to extend his style of leadership in a meeting with President Obama.

SIEGLER: And what better place to be laid-back and go with the flow, than California?

Kirk Siegler, NPR News.

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