Since embarking on its era of economic growth and expansion in 1979, China has played an increasingly large role in the global economy and now ranks as the world’s second-largest economy. California—itself the world’s eighth-largest economy and the principal trade gateway between the United States and China—has been a key beneficiary of this growth. Not only is China a major market for exports and imports for the state, but it has grown into one of the leading international investors in California.

This report looks at the increasingly complex relationship between China and California, as China’s accelerating export engine has had a significant impact on California. Both stand to benefit mutually from strengthening their ties. The key will be to effectively leverage the opportunities California provides, in areas such as innovation and real estate, with China’s desire to find productive returns on its investments and to strengthen its global presence.