The growing commercial, military and political rivalry between the United States and China has its effect on California, which for decades was the link between the two superpowers.
China and the state of California, which is said to be the fifth largest economy in the world, maintain a relationship that has been forging more of 150 years through the immigration, real estate investments and entertainment.
Of 2008 to 2018, the relationship between the two was strengthened, but stopped with the coming to power of Donald Trump, who questioned the supposed commercial disadvantage of his country against China.
The trade war, reflected in the imposi The introduction of new tariffs affected California, which lost independence in decision-making. The policy with China was once again dictated from the capital, Washington DC, thousands of kilometers away.
The arrival of Joe Biden has lowered the tension, but the rivalry remains. The United States believes that China wants to challenge its world leadership; Beijing, for its part, questions North American world hegemony.
And California, despite the restrictions of recent years, continues to be the best place to reflect the encounter between the powers.
“The relationship between California and China is the greatest diplomatic experiment between superpowers”, assures Matt Sheehan, a graduate of Stanford University in Political Science and author of A Transpacific Experiment: How China and California Collaborate and Compete for Our Future (“A Transpacific Experiment: How China and California Collaborate and Compete for Our Future”).
At BBC Mundo we talk with Sheehan, born and raised in California, who studied this particular transpacific relationship after living almost a decade in China.
Why do you say that there is a diplomatic experiment between California and China and that it is the largest among the superpowers?
For a long time, the relationship between the US and China was very distant. They were high-level leaders in Washington DC and Beijing having a conversation.
Ordinary people did not always interact with each other, Chinese companies were not in America and American movies weren’t played in China.
But in the last ten years, all of a sudden, there were hundreds of Chinese students in American universities, much more immigration, great investment in technology companies and in the real estate sector.
And California was at the forefront of each of these trends, becoming the scene of this interesting experiment when two mighty superpowers meet in an earthly level.
Does California function as an independent country, separate from Washington in its relationship with China? How would you describe that relationship and how is it different from the one between China and the United States?
For a long time, California functioned quite independently from Washington DC and the rest of the US government
Between 2008 Y 2018, there was no US national policy on how to treat Chinese students in US universities. There was no national policy, or there was very late, around Chinese investment.
So, the presidents of universities in California or, for example, the CEO of Apple, Tim Cook, became the most important people to negotiate with China.
A from 1850, Washington began to regain its power in the negotiations of local governments, companies and universities with China.
The mayors of California already they cannot invite Chinese investors to build factories in their community or have Chinese investors simply buy California start-ups.
There is a kind of tug of war between the local leaders who were at the forefront of the negotiations for a long time and Washington.
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Who is winning that battle between Washington and California?
The federal government is winning this battle for now.Although there is still a lot of p oder, activity and decision making in California.
The federal government has placed some strict limits on Chinese investment and the way in which that American and Chinese companies can interact with each other.
Also, the federal government has tried to limit many research partnerships between American and Chinese scientists, but those relationships remain very strong. There is still a lot of collaborative research.
How China shaped the life and economy of California? Does happen in the opposite direction too?
The Chinese community and investment have reshaped the appearance of cities largest in California, have changed the physical geography of the state greatly.
They have built new skyscrapers and because of them the price of housing has also increased.
They also contributed a lot of money to the state universities and brought many people from a different culture causing a change.
They reformed Hollywood and Silicon Valley.
But California also had a big impact on China in culture and technology.
Hollywood is the center of film culture in the country and for a long time American films dominated the screens in China. That showed the Chinese what blockbusters looked like and the Chinese tech companies what a global tech company looked like.
And people in China greatly admire the spirit of innovation and creativity in California.
California has caused changes in many aspects in terms of soft power (soft power).
And why California specifically and not another US state?
It’s a perfect storm of factors.
There is a longstanding Chinese community in California, since 1850. When the Chinese wanted to move to the United States, they used to move to where the immigrants were already.
They usually buy properties in communities that are Chinese or work through their investment firms, which can speak Chinese.
Also, California has a lot of what the Chinese want, the Chinese governments and Chinese companies.
The Chinese want clean air to breathe, good universities for their children and the Chinese community around them.
The Chinese government wants an economy that is innovative, it can learn a lot from Silicon Valley and Hollywood.
And Chinese companies want to invest in cutting-edge technology and partner with the best film studios in the world.
Who benefits the most?
Both China and California. I think if you’re looking for a loser it’s the US federal government because it lost power and control over interactions for a long time.
Many California businesses make short-term profits while seeking long-term ones.
If there is a sale of a company to China for US$50 millions, is a huge benefit for a person or a small company. Meanwhile, what China is really doing is acquiring technology and knowledge to know how to build many other companies that are worth much more than US$50 millions.
You could see an imbalance there, but it really depends on whether we’re speaking of universities or companies, it’s a bit of a mix.
How did the Donald Trump administration affect or benefit the California-China relationship?
The Trump administration returned power to Washington DC and established new limits on Chinese investment in technology companies.
In the past it was a company decision to accept investment or sell to Chinese investors.
Before, universities let in as many Chinese students as they wanted. The last government made it difficult for many of them to obtain visas or stay in the country after graduation.
In each of these areas, Trump returned power to Washington DC But the transpacific experiment did not turn into a cold war. Trump helped make the relationship resemble a rivalry and that can be a game changer in many areas.
A lot of people in Washington DC, Both Democrats and Republicans believed that it was necessary to rebalance the relationship, to curb certain aspects of investment.
So, Trump sped things up and made them more erratic. The former president moved the relationship (with China) in one direction, but one day they were best friends and the next day worst enemies. And that’s not good.
However, long-term change was happening and continues under Joe Biden, albeit more predictable and reasonable .
Did the transpacific experiment change with the pandemic?
The pandemic has clearly slowed everything down. There are not as many new immigrants, tourists, or business investments. Progress has been frozen.
But there are also many of the seeds that were planted during the transpacific experiment that grow and mature slowly.
Thousands of Chinese students have graduated from American universities and many are working in local companies.
Many children who were born in China and they came to the United States for high school, now they are bilingual people who give a lot of contributions to the investments that China or Chinese companies made in the US
What is the future of this bilateral relationship between California and China?
They have adapted to a new normal and now everyone is trying to find out how to proceed.
From 2008 And till 2018 there was a lot of activity , new businesses and relationships. Then we had two or three years where everything was so erratic that no one could start anything new.
Now, things are much more closed due to covid and the same relationship between the US and China, although it is becoming a little more predictable.
We will start to see activity in some areas and people doing new things and creating businesses, but within a more limited space than before.
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