Competition, cooperation, and assimilation—these characterize California’s ever-closer connections to greater China. For as the world grows smaller and China’s presence looms ever larger, no place feels this global convergence more than California, where more than 10 percent of the population is Asian; where California businesses send billions in goods to China each year; and where the central focus of California’s cultural interchange, foreign investment, trade, and technology transfer is now squarely focused on the Pacific Rim.
“China is so much a part of the way people live their lives here today,” says Emily Sano, director of San Francisco’s Asian Art Museum, who reached this conclusion only after exploring the connections between China and California as the museum prepared to present an exhibit on Taoism in 2001. “Whether it’s martial arts, herbal medicine, or meditation, these are elements of Chinese culture we feel and see all around us.” Or as Amy Klatzkin, who estimates she is one of 5,000 Bay Area mothers who has adopted a Chinese baby girl in the past decade, puts it, “It’s almost impossible to have your child be the only Asian kid in class.”
Today, about one-third of San Franciscans are of Asian heritage, as are 20 percent of Bay Area residents and 11 percent of all Californians, according to the U.S. Census. One-fifth of undergraduates entering Berkeley are ethnically Chinese. “It’s a comfortable place for an Asian student,” says Elaine Huang, a junior studying economics and Chinese language, and who, with parents who were born in southern China, keeps a foot on each continent.
Here are some other vital signs of the California-China connection:
Trade. When Gov. Arnold Schwarzenegger traveled to China in November, he was only putting an exclamation point on what California’s business leaders already know: China is now one of California’s biggest markets, even while it emerges as one of California’s largest commercial competitors. California’s exports to mainland China increased 25 percent in 2004 to $6.8 billion and up nearly 50 percent since 2001, according to the California Chamber of Commerce. This was more than double the rate of trade in 2000. And while California companies sell software, computer parts, entertainment, wine, and almonds to Chinese consumers, California firms also face stiff competition from Chinese-made textiles, machinery, and even agricultural products. Pirating of software and videos within China is a well-known scourge, costing California firms billions each year. But even for mundane agricultural commodities such as garlic and apple juice concentrate, “China is becoming a competitor in a direct sense,” said Mechel Paggi, director of the Center for Agricultural Business at Cal State-Fresno. Paggi could be speaking about a host of relationships between California and China when he says, “This is a complex relationship that is developing. You have a difficult time sorting out the winners and the losers.” For while California farmers send frozen strawberries to China, for instance, that produce sometimes comes back to California as dehydrated berries ready to be stuffed into American cereal boxes. In addition, as Chinese farmers learn how to produce their own fruits and vegetables more efficiently, they are beginning to squeeze California farmers out of other lucrative export markets, like Japan and South Korea. And cheap Chinese apple juice is putting the squeeze on some California producers of grape juice concentrate, Paggi says.
Because the United States runs such a consistently large trade deficit with China, the Chinese have to reinvest their surplus somewhere, and China’s central bank buys up an estimated $200 billion of U.S. Treasury bonds and securities each year. These purchases, in turn, have kept U.S. interest and mortgage rates surprisingly low, even as the Federal Reserve has boosted interest rates numerous times over the past two years, economists say. These low interest rates sustain the housing boom and offer more license to U.S. consumers to buy Chinese-made clothing and electronics.
Culture. There is more than some irony in this area of exchange, because little more than 120 years ago California workers and their legislators, worried by an influx of Chinese coolies during the construction of the railroads, militated for strict immigration rules that systematically excluded Chinese from reaching these golden shores for six decades. Not until World War II demonstrated the strategic possibilities of an alliance between China and the United States did things loosen up. But then China’s communist upheaval after World War II created further barriers, and politics between the two countries can frequently become rancorous.
Today, the increasingly complex and interwoven economic and cultural influences that connect California and greater China is typified by the fact, for example, that many California real estate agents have to understand feng shui—or the harmonic balance of elements common in Chinese homes—to close their deals. “These days, it comes up a lot,” says Angela Grubb, a Bay Area real estate agent who was born in Shanghai. “It’s just something that has become far more commonplace. I know there are other agents [who aren’t of Asian origin] trying to bone up on it.” Real estate agents quickly learn not to show Chinese buyers homes that are located at the end of a cul de sac, or homes where the front door faces directly into a cross street, or into the upstairs stairway, which allows their vital energy, or chi, to drain away from the house. In some configurations, having the stove next to the refrigerator can prevent a possible sale.
The popularity of Chinese and fusion food as well as dim sum serves as another unmistakable sign of the blending of Asian and American influences, as does the popularity of tai chi classes and meditation, Chinese medicine (including acupuncture), and Chinese calligraphy, which have become so common in the lives of many Californians that to mention them in casual conversation barely merits a raised eyebrow. As this mélange of Chinese and California influences grows so intermeshed, any effort to truly disentangle the threads threatens to rend the very fabric of 21st-century California culture.
Technology transfer. In the early 1990s a first wave of Chinese computer engineers, many from Taiwan, came to earn graduate degrees at Berkeley and Stanford and then landed jobs at leading Silicon Valley firms such as Intel and Hewlett-Packard. At times, the more ambitious moved back to Taiwan to build semiconductor foundries.
Now, the latest wave of Chinese engineers comes from the mainland itself. And though they still seek their advanced degrees at universities such as Cal, they hope to eventually use their accumulated training to grow start-up businesses of their own back on the Chinese mainland, says George Koo, who directs the China Service Group at consulting firm Deloitte & Touche in San Jose.
Bin Tang typifies this newest trend. Tang, 33, who studied physics in Nanjing but collected his graduate engineering degree from Stanford, took his first jobs after college working at Silicon Valley start-ups focused on designing innovative integrated circuits. But three years ago Tang decided to plunge into California-style entrepreneurship with a company focused on the market in his homeland. His new company, Yeepay, allows Chinese customers to place Internet orders and pay their bills directly through their cellular phone accounts, rather than by using credit cards. Three-quarters of his 70-member staff is based in Beijing, and Tang says he himself may return to China next year because, “that’s where the action is, that’s where the market is.”
But even if Tang leaves Silicon Valley to return home, he says his ties to the Bay Area will only increase. “These connections make the ties even stronger between California and China,” he explains. “In the future, there will be more balance in the flow of talent, capital, and business. It used to all be going one way, with people going from China to the States. When it’s more balanced, that’s healthy for the long term.”
Environment and energy. “The dirty coal that gets burned in China doesn’t just stay there,” says Steven Kline, vice president for federal government and regulatory relations at PG&E Corporation. By 2010 a major chunk of California’s ozone pollution will be directly attributable to particulate matter generated by Asian power plants. That’s why PG&E and the state utility commission have taken a major interest in helping China create environmental standards that will improve energy efficiency and reduce the nation’s need for electricity. The state also wants to sell the Chinese on using solar power and other specialized technology developed by California firms, a prominent item on Governor Schwarzenegger’s agenda during his trade mission to China in November.
But competition over energy resources already exists between China and the United States, exemplified when congressional opposition blocked a Chinese state-supported oil firm from buying up Unocal, the oil company based in El Segundo, last year. Eventually, Unocal was purchased by Chevron, but Chinese and U.S. firms can be expected to compete in global energy markets for decades to come.
Babies. Statistics compiled by the State Department show that more Chinese babies are adopted by U.S. parents each year than children from any other country—more than 7,900 from October 2004 through September 2005. Naturally, California parents find the multiracial character of the state an asset in child rearing. “Just by living in San Francisco, we’ve got friends, neighbors, and a dentist who are Chinese,” says Amy Klatzkin, whose daughter, Ying Fry, now 12, attends the Chinese American International School. “Just to be able to walk down the street and not be looked at as a foreigner is a great thing for a kid. It’s the real connections [between China and America] that make this a good place for a mixed-race family.”