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San Francisco strengthens ties with China despite Washington suspicion

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Mayor Ed Lee and California governor Jerry Brown welcome the Chinese presence transforming the city's culture and economy

Tai Chi practitioners stretch in its parks. Restaurants offer copious soy sauce and ginger. An exhibition of terracotta warriors from the tomb of Qin Shi Huang, the first emperor, draws huge crowds. Downtown bristles with signs in Mandarin. The mayor, the son of migrants from Guangdong province, gushes about China's prosperity.

Welcome to mainland America's biggest Asian city: San Francisco. The home of the Grateful Dead, the Golden Gate bridge and the 49ers is fast reacquiring an identity as China's portal to the United States.

A burgeoning Chinese presence is transforming the city's demography, culture and economy, a trend observers expect to accelerate.

"China looks here and it sees opportunity," said Eugene Zhang, president of InnoSpring, Silicon Valley's first US-China technology start-up incubator. "It's very, very attractive for investors. Things are stepping up."

Beijing's political and business elite feted San Francisco's mayor, Ed Lee, the first Chinese-American mayor of a major US city, as a celebrity during his recent 10-day official tour of China.

He touted his city as an opportunity to invest in real estate, information technology and other sectors while enjoying Chinese culture – as well as sunshine and vineyards – on US soil.

Governor Jerry Brown will follow in Lee's footsteps this week bearing a similar message: all of California, not just San Francisco, welcomes Chinese investment, the more the better. "We're going to facilitate billions of dollars of investments," Brown said last week. "Not overnight, but over time."

The courtship contrasts with Washington suspicion towards China. Last year the House Intelligence Committee urged US firms to avoid partnering with Chinese telecom firms, to safeguard customer data, and the Obama administration stopped a Chinese company buying wind farms in Oregon on grounds of national security.

California, on the other hand, can barely restrain its enthusiasm. Hollywood tweaked movies such as Red Dawn, 2012, Battleship and Iron Man 3, dropping Chinese villains or massaging plots to woo China's growing box office. Increasingly films are partly shot in China to circumvent a limit on foreign films.

Brown will lobby Chinese investors to back California's $68bn bullet train, among other projects. He is due to open a state trade office in Shanghai.

Since 2005 China's foreign investments have increased sixfold, reaching $77bn last year, according the China's commerce ministry. Some analysts expect the existing figure to triple by 2020, a huge kitty.

California has so far reaped a relatively modest share, only $1.3bn in 2011 according to the Asia Society, but even that is already having an impact, most notably in and around San Francisco.

Last year InnoSpring, a collaboration between Chinese banks, Tsinghua university and Silicon Valley firms, set up a 13,500 square-foot complex in Santa Clara to incubate technology and media startups. It now hosts more than 40 firms. "It's a good start. We're happy with progress. The weather and the wine adds to the appeal of living here," Zhang said.

A major Chinese biotech company has been mooted to take over the sprawling Bayer HealthCare campus in Richmond and the China Development Banks has agreed to bankroll ambitious building projects on Treasure Island and Hunters Point shipyard, the San Francisco Chronicle recently reported. "The Chinese are most definitely coming."

*'The potential is 10 times greater than what we're seeing'*

Chinese and Japanese immigrants flocked to the bay area two centuries ago in hope of gold and work, establishing thriving communities swollen in recent decades by Vietnamese, Thais and other Asians.

The city's most recent census showed that whites, at 48%, no longer comprise a majority. The proportion of Asians has jumped to 33%. Among young people the proportion is nearly 40%. Demographers expect Asians to become the biggest ethnic group.

"Politically and culturally, the result is something of a rumbling mid-Richter scale earthquake," said an essay in Highbrow magazine.

San Francisco Magazine caused a stir last year when it ran a cover story on Rose Pak, a legendary Chinatown activist, under the headline: "Who Runs San Francisco?"

New arrivals are swelling Chinese clout and visibility, but they remain a small fraction of what may come, said Skip Whitney, who heads the China Services Group of the real estate broker Kidder Matthews. "We're at the tipping point. The potential is 10 times greater than what we're seeing today. But we need to be patient."

Cultural and language barriers were still damming the flood, said Whitney, who co-founded ChinaSF, a public-private initiative to strengthen business ties. Lee's election in 2011 had jolted Chinese interest in the city, he said. "It's been huge. They are very pleased."

The Asian Art museum, which opened in 1966 with the mission of making San Francisco America's bridge to China, is now growing into that role, said its director, Jay Xu.

China has lent 10 terracotta warriors – the maximum it allows leave China – for an exhibition which has broken attendance records at the museum's new home opposite city hall.

A Chinese American mayor and ubiquitous Chinese culture and cuisine reassured visitors from the Middle Kingdom, said Xu. "Many think the US is very unsafe and filled with gun violence. When they come here and see other Chinese on the streets, it's a comfortable environment for them." Reported by guardian.co.uk 17 minutes ago.

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