Will California Spend Another $900 Million in China?

Commentary

A friend of mine in California recently told me about a Chinese consular official who specializes in “subnational” diplomacy. An elite California international policy nonprofit admitted him as a member. The official’s goal is likely to be to understand political and business networks in California and to find tech titans and politicians in the region who are friendly enough to the Chinese Communist Party (CCP) to warrant its support. The nonprofit should know better.

The CCP’s influence in California is already significant, as evidenced by another corporate-funded nonprofit that pays for governors of both political parties to travel internationally, including to China. The nonprofit’s board of directors is appointed by the governor. In 2005, then-Gov. Arnold Schwarzenegger benefited from a $353,000 round-trip flight to China on a private jet. Gov. Gavin Newsom and his delegation visited China in 2023. The trip was paid for by $300,000 from the William and Flora Hewlett Foundation.

Although the two Hewlett-Packard companies are officially separate from the foundation, they had developed high-tech joint ventures and were conducting research and development in China by that year. Many politicians likely consider the two companies and the foundation to be linked.

Newsom’s visit with CCP leader Xi Jinping and smiles for the camera have appeared to normalize the Chinese regime’s dictatorship and human rights abuses. It shed light on the country’s clean energy industry; Newsom’s clean energy plan would likely result in major revenues for China.

In late March 2026, Newsom announced a $900 million transport system modernization. There was no mention of requiring these U.S. taxpayer funds to help real U.S. businesses or create U.S. jobs beyond already existing laws. If the money is eventually used for electric buses, China’s BYD corporation could manufacture these in California.

BYD is closely linked to China’s military and includes substantial numbers of Chinese parts in the buses. Buses loaded with BYD tech would be a security liability. And the profits would likely be repatriated to China, benefiting its military forces.

A California giveaway to BYD wouldn’t be the first time. During the COVID-19 pandemic, Newsom agreed to a $990 million contract with BYD to purchase face masks. It was reportedly a secretive, no-bid giveaway to a company with approximately zero experience in making masks. The deal came under bipartisan criticism from California legislators, who were asked to foot the bill without seeing the details. Wouldn’t it be better for California to be transparent about the details of its China purchases, or better yet, spend its tax money elsewhere?

The cost of getting elected and obtaining international exposure is apparently Faustian, at least once in a while. During Newsom’s successful 2018 run for governor, his and his team’s campaigns allegedly received tens of thousands of dollars from sources linked to the Chinese regime through its United Front Work Department.

Another cost is the deemphasis of human rights and democracy when dealing with Beijing. An “accomplishments” page from the governor’s office for the 2023 visit did not mention “human rights” at all, which should be top of the agenda for anyone who believes in that and other American values such as liberty, democracy, and the market system. But the page did repeat Chinese state media’s support for “subnational cooperation.” Promoters of subnational diplomacy argue that it is normal and purely economic. But the evidence detailed here suggests otherwise.

Newsom’s prize for the China trip may have been the CCP’s support for him in 2024 when President Joe Biden stepped out of the race for a second presidential term. China likely wants more exports to California, including exports with security vulnerabilities, even as it protects its own supply chains from dependence on U.S. imports. California’s exports to China dropped to $10 billion in 2025 from $18 billion in 2022.

California exporters are likely pressuring Newsom to reclaim some of these lost opportunities, even if it means more cozying up to the dictatorship. They are the same people who could donate to Newsom if he runs for president in 2028. The donations need not run through regime organs such as the United Front Work Department. That would attract too much attention. They can more easily and substantially flow through U.S. businesses trying to curry favor in Beijing.

The benefits for the CCP are immense compared with the paltry sums needed to keep politicians onside. California imported $76 billion from China in 2025, far more than it exported to China. California’s trade deficit with China that year was $66 billion. So California is the customer relative to China and shouldn’t look like such a supplicant in Beijing.

Over the same period, 2022 to 2025, California’s exports to Taiwan (a democracy) increased to $14 billion from $10 billion. Imports from Taiwan were only $63 billion, making the deficit far lower, at $49 billion. So Taiwan not only shares American values, but also is a better trade partner for California than China. One rarely hears this from the top politicians in Sacramento.

California’s booming tech sector is likely the top driver of Beijing’s political influence in Sacramento. Companies such as Apple, Qualcomm, and Broadcom all have major revenues or manufacturing dependencies in China. Big tech spent $39 million to influence California state politics in 2025. This money could influence California politicians to be more friendly to the CCP than is warranted by the CCP’s human rights abuses and threats against neighbors, not to mention China’s status as the world’s biggest polluter.

It’s hard to explain Sacramento’s ethical compromises when it comes to China without looking at the campaign donations upon which our politicians depend for election. This U.S. conduit for foreign influence is a weakness in our democracy that needs to be fixed by new national legislation as soon as possible. California governors should be made aware in no uncertain terms by the federal government that the CCP is neither California’s nor America’s friend.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.