State of California Worked to Attract Chinese Foreign Direct Investment

Questions continue to surface regarding the mysterious, unlicensed COVID-19 bio-lab which has been ordered to cease operations within Reedley, California. The origins of the business dealings between the City/County of Fresno and the Chinese owned Universal Meditech/Prestige Biotech are under immense scrutiny. KVPR reported “the company had operated in Fresno since 2018 until a fire in 2020 and a reported eviction from its location at the North Pointe Business Park in 2022 began to imperil the company.”

As cited in my recent article in The Globe, “In 2019, Mr. Zhaoyan Wang, CEO of UMI, praised the Fresno County Economic Development Corporation’s guidance regarding tax credit opportunities and HR resources.

“The EDC has provided us with guidance and HR resources as well as worked with us in terms of the NEO program, which has helped us save a lot of time and working capital on employee hiring. The EDC has also informed us about other incentives available for business, such as California Compete Tax Credit and referred us to proper departments and personnel for further assistance.” – Zhaoyan Wang

A February 2019 article from The Business Journal, reported:

“A Tulare manufacturer of medical devices has made the move to Fresno, and has created 10 new jobs in the process.

Universal Meditech’s new home is located in the North Pointe Industrial Business Park near North and Orange avenues. The 3-year-old company develops, makes and sells in vitro diagnostic devices including pregnancy, ovulation and menopause tests.

Zhaoyan Wang, Universal Meditech CEO, attributed lower costs, location and access to a diverse pool of capable employees in making the decision to move to Fresno.

“Everyone in Fresno, from the Economic Development Staff and City Planners to the property owner that offered us beautiful space to lease at an affordable price were wonderful,” Wang said in a statement. “The entire process was smooth and we are extremely happy with our decision to move our headquarters to the City of Fresno.”

The company had determined its previous space was too expensive and didn’t suit their growing needs. Candace Liu, Universal Meditech’s chief operating officer, said the company explored other options in California and even out of state. A tag team effort from the City of Fresno Economic Development Department and the Fresno County Economic Development Corp. played a key role in relocating their manufacturing and research and development operations to the company’s 20,000 square-foot Fresno space.

“We are extremely grateful for their commitment to keep growing companies like us in California,” Liu said.

To date Universal Meditech has hired about 10 new employees in Fresno, and have retained a number of their South Valley employees who decided to remain and make the commute north.

Fresno Mayor Lee Brand attributes the successful move of Universal Meditech, among others, to the availability of a well-trained Fresno workforce combined with an influx of available industrial space offered at affordable prices.

“We have everything that businesses need to ensure ongoing success,” Brand said. “If you are looking for the perfect environment to allow your business to grow, Fresno should be at the top of your list.”

One name stood out from the Fresno Economic Development Corporation’s current Board of Directors, Mr. Ross Parnagian, Vice President of Real Estate, Fowler Packing, one of the largest growers of fresh table grapes and citrus in the nation. In addition to the packing company, the Parnagian Family owns a large suite of businesses within the Fresno area. According to the Secretary of State’s business registry database, Mr. Dennis Parnagian, Chairman of Fowler Packing Co; is the registered agent of North Pointe Business Park.

In both December 2020 and July 2022, the company filed a Property – Commercial Eviction lawsuit against UNIVERSAL MEDITECH, INC , a California corporation.

As investigations continue surrounding Universal Meditech/Prestige Biotech, concerns are growing. In reference to the Reedley lab location, ABC 30 reported:

“court documents show the lab was creating illegal pregnancy and COVID-19 tests.

There were 178 dead mice and 773 that had to be euthanized, and code enforcement found a large amount of mice poop on the floor when entering the facility.

A state waste investigation also found several freezers with containers labeled as serum or plasma and containers with the name of an infectious agent.”

According to ABC 30, a 2015 article discusses the Fresno area’s part of a Global Cities Initiative to boost trade:

Fresno Mayor Ashley Swearengin said, “We are so pleased to announce that Fresno the San Joaquin Valley has been designated a Global City participant.”

Mayor Swearengin announced Fresno’s selection in the program. It means agencies like the Fresno Economic Development Corporation will get money to help market valley products overseas.

In 2018, Mr. Leland Parnagian served as an At-Large Director to the Fresno County Economic Development Corporation. Per the nonprofit’s 2018 annual report, Universal Meditech, Inc. became eligible for PG&E’s ‘new and improved economic development rate.’

“PG&E’s newly released Economic Development Rate (EDR) has made it easier to qualify for expansion, attraction, and retention projects, and for the first time includes small businesses using less than 150 kW of demand. The EDR is a rate incentive to help companies locate, expand, or stay in California. The incentive is also aimed at helping businesses grow and maintain jobs. Commercial and industrial customers can receive the Enhanced EDR discount of 25% (within Fresno County) on the majority of their electric costs, for a term of five years.”

CLIENT TESTIMONIAL:

“As Universal Meditech explored locations in California and out-of-state to more appropriately fit our anticipated growth, PG&E’s Economic Development Rate played a major role in our ability to not only stay in California but to locate our manufacturing and R&D operations in Fresno. We are extremely grateful to PG&E and the EDC for their commitment to keeping growing companies like ours in California.” -Candace Liu, COO UNIVERSAL MEDITECH, INC

To qualify, businesses must meet incentive criteria, including:

• Commercial and industrial businesses that could locate or expand out-of-state

• Existing businesses that would cease operations in California without the EDR assistance

• And new this year, smaller businesses with less than 150 kW of electric load may apply

A 2017 press release issued by the Governor’s Office stated:

“State Hosts First Ever Select California Investment Summit to Attract Chinese Foreign Direct Investment.”

“California economic development and business representatives pitched their regions and projects as destinations for new foreign direct investment to a group of 22 Chinese investors focused on clean tech, water innovation, sustainable development, zero emission vehicles, and more.”

Sacramento, Calif. – On the heels of Governor Brown’s highly successful trip to China, the Governor’s Office of Business and Economic Development (GO-Biz), in partnership with the California-China Trade Network, hosted the first ever Select California Investment Summit in Sacramento to connect Chinese investors with California economic development and business leaders looking to bring projects to their regions. California economic development and business representatives pitched their regions and projects as destinations for new foreign direct investment to a group of 22 Chinese investors focused on clean tech, water innovation, sustainable development, zero emission vehicles, and more.

“Chinese investors are looking to California for new opportunities and GO-Biz is actively working to connect them with regional business leaders that want to attract new sustainable development projects to their areas,” said Awinash Bawle, GO-Biz Deputy Director for International Affairs and Business Development. “This summit is a continuation of the Governor’s efforts in China and further proof that California is a world leader in the cultivation of clean technology projects that help address climate change, decarbonize our economy, and accelerate the move towards a zero emission vehicle future.”

The Select California Summit was held at the Leland Stanford Mansion in Sacramento, CA and featured 14 business groups including Bay Area Council, California Asian Pacific Chamber of Commerce, City of Sacramento, Fresno Economic Development Corporation, UC Merced, Shasta Economic Development Corporation and a cohort of zero emission vehicle companies. Throughout the day, each pitched their regions, potential projects, locations and investment opportunities to a delegation of 22 Chinese investors looking to California as their priority market.

“As the nation’s second largest exporter our state continues to benefit greatly from a robust trade agenda. Select CA helps to drive opportunities for trade and investment with California,” added Bawle.

Fan Dai, the Special Advisor to the Governor on China, presented on outcomes from the Governor’s trip to China including the establishment of a California-Beijing Clean Tech Innovation Center, which will work hand-in-hand with the GO-Biz Innovation Hub program to promote clean tech innovation and business development.

Moreover, Visit California hosted an authentic Chinese culinary experience and showcased California’s unique lifestyle – a key determinant in a business’s decision of where to invest.

“Between 2000 and 2016, California secured 415 investment deals valued at $25.5 billion from mainland China investors, much of which went into renewable energy and other sustainability projects,” said Jason Law, GO-Biz Special Advisor for Foreign Investment and Affairs.

“Attracting inbound international investment is a key driver of California’s economic growth and success. 631,500 workers in California are employed as a result of global investment.”

The Chinese delegation will travel to Southern California to participate in the second portion of our Select California investment efforts. They will be hosted by our California-China Trade Office Network Partner, the Los Angeles World Trade Center of the Economic Development Corporation, for a series of meetings showcasing additional projects and destinations for new foreign direct investment.

Next week, GO-Biz will lead a state-wide delegation of ten local and regional economic development organizations from across California to the SelectUSA Investment Summit in Washington D.C.  The annual summit was originally established by President Obama in 2011 to connect state leaders with foreign investment opportunities. This year’s summit features more than 2,500 participants from over 70 international markets. GO-Biz will host a state pavilion to promote individual local assets and highlight the resources and reasons why California is the number one destination for foreign direct investment.”

GO-biz later issued a tax credit of $360,000 to Universal Meditech in March 2019, as referenced in my recent article in The Globe.

According to AOL News, in November 2022, Chinese officials visited the City of Fresno to talk business, but one city leader refused to meet with them.

“Fresno politicians and business leaders dipped their toes into the global business space this week during a meeting with Chinese officials to explore trade and investment opportunities.

At least one Fresno elected official made a political statement about COVID-19 policies by declining the invitation.

The meeting was hosted by Fresno Economic Development Corporation, which is a member of California Gov. Gavin Newsom’s Office of Business and Economic Development’s California-China Trade and Investment network.

The EDC facilitated a meeting Monday at Chuckchansi Park between local elected officials and business leaders with China’s Consul General Zhang Ping, whose district covers multiple southwestern states.

“As we have numerous companies in Fresno County that export to China, the EDC hosted the visit,” CEO Lee Ann Eager told The Bee. “We hope to have more opportunities for foreign direct investment in Fresno County and look forward to additional meetings like this with all of our trade partners.”

Among the elected officials to attend the meeting and welcome the consul general was Fresno Mayor Jerry Dyer.

“Welcome to Fresno,” Dyer tweeted. “Hope you were pleased to learn more about our local community, the business environment, and the work that Fresno County EDC does to connect to opportunities.”

At least one local elected official declined the EDC’s invitation. Fresno City Councilmember Miguel Arias tweeted that he refused the invitation, partly due to recent protests in China over strict COVID-19 lockdown rules.

“Today I declined the invitation to meet with the #China delegation seeking to do business in our city,” Arias said in a tweet. He also shared screenshots of news stories about the protests.

“The recent #ChinaProtests are the latest example of a communist country placing more value on business interest than human rights. The city of Fresno is better than that,” Arias said.

Protesters all over China have taken to the streets in response to the country’s “zero COVID” policies to combat outbreaks. The Chinese government swiftly responded by deploying police and tightening information.

Fresno Councilmember Mike Karbassi and Fresno County Supervisor Steve Brandau joined Dyer in meeting the Consul General.

I briefly spoke with Fresno Councilmember and Fresno County Supervisor candidate, District 3, Miguel Arias. Mr. Arias helped to further clarify the working relationship between the County, City and Economic Development Corporation as follows:

“Different jurisdictions have different authority. The County of Fresno is responsible for awarding toxic materials permits and operates the public health department which oversees the City of Fresno. During the pandemic, the City of Fresno was at odds with the County regarding proper implementation of COVID-19 policies to best ensure the public’s safety. The County was not responding aggressively enough to keep stakeholders safe. The city was never informed that the lab received a toxic material permit, around 3 years ago, and was not aware that Universal Meditech (UMI) was relocating from Fresno to Reedley, CA. County Supervisors indicated that they were following the guidance of the state regarding public health to potentially shift blame. The City is currently obtaining a list of toxic waste permits awarded by the County of Fresno to audit all permits awarded within City limits.”

“The City of Fresno has a $50k contract per year with the Fresno Economic Development Corporation to help bring business to the City.”

As a seasoned politician, Mr. Arias had his own conflict “with Chinese investment firms and the Chinese government because they have drained capital, not provided value for apartment complexes, and placed the facilities in worse condition than before. Therefore, there was no interest to meet with the Chinese Consul last year.”

“Purpose is not the sole pursuit of profits but the animating force for achieving them. Profits are in no way inconsistent with purpose — in fact, profits and purpose are inextricably linked.”

-Larry Fink, CEO of BlackRock