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Tue, May

From Party Princeling to President?

CLIMATE

CLIMATE WATCH - Last week, California governor Gavin Newsom met with Xi Jinping, general secretary of the Chinese Communist Party, at the Great Hall of the People in Beijing. It was quite the moment: two prominent leaders, often referred to as “princelings.” One of them has demonstrated little regard for free market principles and, during the Covid–19 pandemic, advocated for stringent lockdown measures, including the ability to shut down privately owned businesses and curtail individual liberties and religious freedom. The other, of course, is the leader of China.

Newsom’s “climate-focused tour” in China included engagements at Hong Kong University to discuss climate change and the economy, a brief stop in Guangdong province for discussions with local leaders regarding electric vehicles and public transit, and several days in Beijing to confer with Xi on climate initiatives and trade relations, as well as to go on a jaunt to the Great Wall.

Newsom is the third consecutive California governor to make an official visit to China, but this one comes at a time when the Golden State’s dependence on Beijing has never been higher, especially when it comes to its aggressive climate objectives. Newsom’s administration has churned out one environmental or green-energy regulation after another, including a ban on new gasoline-powered cars by 2035. China’s role as a major source of the raw materials and manufacturing essential to green technologies is integral to Newsom’s vision for California.

Xi’s commitment to green goals raises some obvious contradictions: China accounts for nearly a third of the world’s total greenhouse gas emissions, and approximately half of that comes from its power sector, which continues to build new coal power plants. But Newsom’s green dreams are impossible without China, which currently dominates the global electric-vehicle (EV) supply chain. According to the International Energy Agency (IEA), China produces about 75 percent of global lithium-ion batteries, a key component of EVs.

Meantime, surging electricity rates are causing California consumers to question their decision to switch from gas-powered cars to electric vehicles, enticed by the prospect of saving money on fuel costs. According to the Bureau of Labor Statistics, the national average price per kilowatt-hour (kWh) for electricity was 17 cents last month. By contrast, consumers in Los Angeles and San Francisco are paying 28 cents and 35 cents per kWh, respectively—165 percent and 206 percent higher than the national average. San Diego residents pay the highest rate in the nation, at 48 cents per kWh, nearly 282 percent above the national average. To save money, they may want to consider running power lines into neighboring Tijuana, Mexico, where the cost reaches only nine cents per kWh. One of the underlying causes for California’s escalating electricity costs is Newsom’s decision to shut down natural gas plants in favor of renewable energy sources.

In Shenzhen, Newsom test-drove a hybrid vehicle manufactured by BYD Company, a massive conglomerate with ties to the Chinese Communist Party. Newsom gleefully praised the autonomous vehicle, which offers a self-turning mode and can float on water. BYD hopes to bring the car to America, but at $160,000, its price tag is a stretch even for Californians, whose median income amounted to $85,300 in 2022.

Newsom’s visit with BYD was not without controversy. In April 2020, he awarded a no-bid Covid-19 contract worth $1 billion to BYD’s medical-manufacturing division. Inked in the pandemic’s early days, the agreement was meant to supply California with 200 million masks per month. But the administration withheld crucial details of the contract. BYD also failed to meet early delivery deadlines and ran into difficulties in its initial federal-certification vetting. Furthermore, the state paid $3.30 per N95 mask—four times more than the 79 cents Los Angeles paid for similar supplies from a U.S.-based company. Yet Newsom renewed the BYD contract a few months later, tacking on another mask order worth $315.6 million.

Perhaps the most glaring problem with Newsom’s visit was his apparent failure to discuss California’s escalating fentanyl-related deaths with Chinese officials. According to the Centers for Disease Control, fentanyl abuse is now the leading cause of death for Americans 18–45, surpassing heart disease, cancer, motor-vehicle accidents, and Covid-19. But fentanyl is also highly profitable for those involved in its production and distribution, and China is the world’s primary source of the precursors of illicit fentanyl. These precursor chemicals are sent to Mexico, where they are transformed into fentanyl-containing tablets and smuggled into the United States via the porous southern border. China is responsible for more than 90 percent of illicit fentanyl in the United States.

In 2022, California led the nation in total deaths from fentanyl, with 6,453 deaths, followed by Florida (5,083) and New York (4,950). Recognizing the gravity of this crisis, the Office of the Governor of California recently announced the establishment of a task force in collaboration with San Francisco to investigate opioid-linked deaths and hold drug traffickers accountable. Newsom is notorious, however, for setting up task forces that shift blame. From reparations to retail theft, he has handed off California policy issues to unelected representatives to “study,” hoping that the issues will just go away. Shutting down the fentanyl production chain in China is critical to putting an end to this deadly crisis, but Newsom has consistently failed to address this issue.

Newsom has repeatedly said that he will not challenge Joe Biden for the Democratic Party presidential nomination in 2024. But it is hard to avoid the conclusion that one of the goals of his trip and meeting with Xi was to burnish his foreign policy credentials in advance of a potential presidential run. If the stars do align for Newsom in 2024, Xi might see him as an appealing candidate for China’s purposes. A partnership between the two princelings could usher in new economic opportunities for Beijing, while also offering California businesses a potential source of foreign investment—albeit one that may not prioritize the interests of everyday Californians or Americans.

(Soledad Ursúa is a finance professional and elected board member of the Venice Neighborhood Council. She holds an M.S. from The New School for Management and Urban Policy. She can be found on Twitter at @SoledadUrsua.). Photo by Huang Jingwen/Xinhua via Getty Images