Brice Adams | Capitol Region Vice Chair | Contact: email@example.com
Over the past forty years, California companies have benefitted from en masse trade with China. Hollywood and Silicon Valley being some of the biggest beneficiaries of this as Chinese citizens watch Hollywood films and tech firms employ large amounts of Chinese manufacturers in their factories (I'm looking at you Apple). Now that the Chinese Corona virus outbreak has turned into a massive economic Black Swan event that will redefine the world economic order, not quite seen since the 1973 OPEC crisis or the '08 financial crisis, how will California fair?
California companies have long since done business in the state and the state corporations have done business with China in the past, but how will this effect California in the future? Corporations in Silicon Valley have widely been the beneficiaries of large tax breaks and exemptions in Sacramento, and have in returned funded a multitude of Congressional, legislative, and ballot measures through entities such as the Chan-Zuckerberg foundation. But seeing as the Chinese Coronavirus pandemic has hobbled the world economy and people have slowly been turning desperate and have begun protesting, what will happen to the state's financial situation?
California, for as long as anyone can remember, has always gone through stages of surplus and recession, and is on the possible event horizon of another one. Seeing as the state is still running a massive debt and everyone is preoccupied with the crisis at hand, another one may happen to the state's treasury very soon. Yet again this November the state wants to raise property taxes, implement rent control, and add a multitude of new taxes to finance its bloated welfare budget and failing public school system. Voters who have seen whatever they have left drained away and the loss of their jobs will not vote for this, and are likely to leave the state entirely once the dust settles in larger numbers than they were before. But the exodus crisis is just one of many.
As previously stated, China has done plenty of investing in not just California businesses, but property. Chinese investors regularly buy expensive, high markup properties across the state that they barley use, leaving them mostly vacant. CALPERS, the state run public retirement fund recently had to fight off accusations that it's chair Ben Meng, a Chinese immigrant was working for Chinese Communist Party and that CALPERS itself was a compromised entity to China. The Trump admin said it was reviewing the matter, meaning that this accusation does have some merit, and that a possible investment realignment in the state's largest unfunded liability will be in trouble, putting California itself in trouble and needing answers that the ruling state Democrat party may not have the answer for.