China’s investment in California was a focus of the 2015 Milken Institute California Summit, held today in Marina Del Rey, California. Curtis S. Chin, Asia Fellow at the Milken Institute and Former U.S. Ambassador to the Asian Development Bank moderated a panel discussion on Strategies to Attract Foreign Direct Investment, where the topic came into focus.
Joining Chin on the panel was Caroline Beteta, President and CEO, of Visit California, and Juan Carlos Briseño, Trade and Investment Commissioner, ProMéxico, Sonnet Hui. Executive Project Director, Hazens Group, Brian Peck, Deputy Director, International Affairs and Business Development, California Governor’s Office of Business and Economic Development and John Scull, Managing Director, Southern Cross Venture Partners.
China real estate investment in California in focus
China Real Estate Developer Hazens Group’s recent investments into the Los Angeles real-estate market was one highlight of the panel discussion. As LA Downtown News has reported, [Hazens Group] “broke into [the Los Angeles market] with a purchase of the 802-room Sheraton hotel at Los Angeles International Airport in December 2013”. The firm is now in the process of developing a $700 million three high-rise project in Downtown Los Angeles, its’ first ground-up development in the United States.
Hui noted the similarity between Hazen’s home city of Shenzhen and Los Angeles, the attraction Los Angeles has for China’s tourists and investors alike, but also the challenges posed when seeking to gain regulatory approvals necessary for undertaking California development projects. She also noted the benefits these developments bring to California — including retention of local legal, accounting and construction sector professionals, among others. “In recent months,” LA Downtown News also reported that “Chinese developers Greenland and Oceanwide have also begun multi-tower mega-developments [in] Downtown Los Angeles.”
California leading US state recipient of foreign investment
As Ambassador Chin outlined, California received 48.9 Billion in foreign investment in 2014, followed by New York State at 35 Billion; Japan and the UK lead all nations as a source of foreign investment into the United States and the bulk of those investments are M&A related; China’s growing investment into the state is focused largely in the Los Angeles and Orange County areas of Southern California.
Opportunity and challenge for foreign investors
Panellists discussed a variety of unique attractions California holds for investors including a climate of entrepreneurship, government incentives, leading universities with research & development capabilities, and great weather. But also cited challenges including aging infrastructure, tax and regulatory hurdles.
For more information about the 2015 Milken Institute California Summit, please see the event website.