07/24/2012 08:15 pm ET

San Francisco-China Trade Agreement Strengthens Ties Between City And Asian Superpower

On Tuesday morning, San Francisco Mayor Ed Lee joined with California Lieutenant Governor Gavin Newsom and Chinese Vice Minister of Commerce Chao Wang at San Francisco's City Hall for the signing of a trade agreement that strengthens ties between San Francisco and the Asian superpower.

Recent years have seen San Francisco broadening its economic relationship with China. Voters elected Lee, the city's first Chinese-American chief executive, in November.

The city later established ChinaSF, a public-private partnership between the Mayor's Office and the San Francisco Center for Economic Development that works to promote business collaboration between Chinese and San Francisco-based companies with a focus on leading Bay Area industries: bio-tech, green energy, digital media and finance.

"The idea behind it was basically leverage this long-standing history that San Francisco has with China," ChinaSF Founder Ginny Fang explained to Biz Tech Day, noting that when San Francisco became Shanghai's sister city over three decades ago, it was the first American city to forge such a relationship with a Chinese counterpart. "The goal is really to bring Chinese investment and Chinese businesses to grow and expand in San Francisco to bring jobs into our region and also help San Francisco-based businesses grow into the China market."

Fang explained that China and the U.S. have very different business cultures, so it can be confusing for a company operating on the other side of the Pacific for the first time to do something as simple as apply for a business license. The orgnization has successfully helped over a dozen Chinese companies, including rapidly expanding solar firm SunTech, open offices in the Bay Area.

Representatives from San Francisco traveled to Beijing last month for the U.S.-China Energy Efficiency Forum, where they signed a memorandum of understanding with the National Development and Reform Commission. The memo established a bi-lateral trade agreement to engender greater collaboration on sustainability issues.

It was the first such pact between an individual American city and the Chinese central government.

Chinese investment has become increasingly important in San Francisco. When waning domestic interest nearly caused an ambitious development plan to transform the city's blighted Hunter's Point shipyard to fail, developer Lennar looked to the China Development Bank. The government-controlled institution famous for funding massive Chinese construction projects provided San Francisco with the necessary $1.7 billion in funding.

In a recent San Francisco Chronicle editorial, San Francisco Chamber of Commerce President Steve Falk opined that Chinese investment in the city is something to be welcomed.

But not everyone is so thrilled with the city's increasingly close ties with China. In a Tuesday morning blog post, SF Citizen cited China's bullying of its neighbors over maritime rights in the South China Sea as one reason to approach this blossoming relationship with caution.

Even so, San Francisco isn't the only facet of the Golden State working to boost trade with China. Earlier this year, Governor Jerry Brown opened two official state trade offices in China.

"The pacific rim has become the center of the world economy, presenting California with countless opportunities to grow alongside our neighbors across the ocean," Brown said in a statement to the Sacramento Bee. "The office will encourage direct investment and further strengthen the existing ties between the world's second- and ninth-largest economies."