Law curbing labor abuses abroad not working well

Good morning. TGIF. On the day after Gov. Jerry Brown signed ambitious climate change legislation, we’re reminded that laws don’t always work as planned.  

A statute passed by California lawmakers in 2010 to stem labor abuses abroad has been of meager help in policing tech giant Apple, a group that studies labor abuses in China claims.

The California Transparency in Supply Chains Act, heralded by political leaders as a measure to police poor working conditions in companies doing business in California “has little influence on the labor conditions of these suppliers” in China, Li Qiang, executive director of China Labor Watch, said in a statement to CalWatchdog. “As such, labor rights violations are still prevalent in these factories.”

A study released in late August from China Labor Watch reported that at the Shanghai, China, facility of Apple supplier Pegatron, “working conditions are terrible, and workers are subject to terrible treatment. Currently, Apple’s profits are declining … to mitigate the impact, Pegatron has taken some covert measures to exploit workers.”

CalWatchdog has more.

In other news:

• More about what that climate change legislation calls for and how it’ll work, from the Los Angeles Times. 
• And even more on climate change legislation: How California defines disadvantaged communities when deciding where to send funding for local environmental programs. The Sacramento Bee has more. 
• “Orange County Rep. Loretta Sanchez on Thursday condemned the burial of millions of pounds of nuclear waste on a San Onofre beach bluff and faulted her opponent in the race for the U.S. Senate for not fighting the controversial project,” writes The Orange County Register.
• “Rep. Duncan Hunter says he doesn’t want a new federal policy to stop companies from donating tobacco products — specifically cigars — to members of the military,” reports The San Diego Union-Tribune.

Bonus:

• Looking for a long weekend read? Molly Ball in The Atlantic on how the world of political consultants works… or doesn’t work. 

Legislature:

• Gone ’til December.

Gov. Brown:

• No public events announced.

Tips: matt@calwatchdog.com

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The California Transparency in Supply Chains Act, heralded by political leaders as a measure to police poor working conditions in companies doing business in California “has little influence on the labor conditions of these suppliers” in China, Li Qiang, executive director of China Labor Watch, said in a statement to CalWatchdog. “As such, labor rights violations are still prevalent in these factories.” A study released in late August from China Labor Watch reported that at the Shanghai, China, facility of Apple supplier Pegatron, “working conditions are terrible, and workers are subject to terrible treatment. Currently, Apple’s profits are declining … to mitigate the impact, Pegatron has taken some covert measures to exploit workers.”

It’s the seventh report to allege worker abuses by Apple’s Chinese suppliers from New York-based China Labor Watch since 2012.

The California Transparency in Supply Chains Act directs companies of a certain size to declare through a public posting that they are attentive to potential abuses along their supplier base. The goal is to stem human trafficking and slavery, advocates say. Companies last year received a letter from the state Attorney General’s Office, informing them that “your company must post on its Internet website the required disclosures if it meets the eligibility criteria – namely, if your company is a retail seller or manufacturer doing business in California and has annual worldwide gross receipts that exceed $100,000,000.”

But the act doesn’t mandate action to address shortfalls in the supply chain. The disclosures are the only requirement, although they have led to lawsuits filed by citizens who allege companies have filed misleading or false disclosures, using California’s liberal laws regarding consumer rights.

“This bill, it’s a very simple bill, it requires businesses to disclose their efforts to eradicate slavery from their supply chain,” former Gov. Arnold Schwarzenegger said during the ceremonial signing of Senate Bill 657, which created the supply chains act. “This would increase transparency, allow consumers to get more information and make more choices and motivate businesses to ensure humane practices.”

The measure is responsible for several current investigations of companies based on the disclosure required by the supply chains act, state Department of Justice spokeswoman Kristin Ford said.

She declined to comment on Apple’s performance with regard to the act.

Apple, founded and based in Cupertino, Calif., since 1976, has complied with the reporting requirement. In its latest filing in March, Apple said it has a “robust auditing process which has expanded deep into the supply chain over the past ten years. This statement reflects our progress … to combat and prevent human trafficking, slavery, servitude, and forced, compulsory, or involuntary labor in our supply chain.” Apple, though, changed its primary supplier for the iPhone in 2013, handing the deal to Pegatron. Since then, Pegatron has handled other technology for Apple. Last year, according to its annual corporate report, Pegatron worked on Apple CarPlay, which delivers information from an iPhone to a vehicle’s display panel.

Taiwan-based Pegatron is a public corporation with an octopus of subsidiaries throughout Asia. It supplies electronics to a number of companies including Microsoft. But the 19-page labor study from China Labor Watch insists that “Apple is the real reason working conditions are deteriorating.”

Despite Schwarzenegger’s declaration that consumers will “make more choices” with information gleaned from the supply chain act, Apple this year ranked as the world’s most valuable brand for the sixth consecutive year in Forbes magazine’s annual study. Apple’s $154 billion worth is 87 percent higher than that of second place Google, according to the magazine.

Apple’s press office did not return a call.

China Labor Watch said that Apple’s favor among consumers has allowed it to skate on its alleged violations in China.

“Apple’s use of public relations and their popularity here in the U.S. may be why they are able to escape regulation/examination,” Qiang, the executive director of China Labor Watch, said in his statement to CalWatchdog. “In addition, Apple is very much concerned about their shareholders, as opposed to that of workers overseas. “

With California’s cap-and-trade legislation on the ropes, zero-emissions vehicle quotas have emerged as the next piece of environmental policy up for debate in Sacramento.

A new bill, soon to be introduced by Assemblywoman Autumn Burke, D-Los Angeles, would “require that 15 percent of new vehicles be emission-free in less than a decade, a significant escalation in the state’s efforts to speed the evolution of new car technology,” according to the Associated Press. “Automakers that fail to sell enough electric vehicles would be required to make payments to rivals that do or pay a fine to the state,” the wire noted.

“Under current law, automakers accumulate credits for selling vehicles with cleaner technology and must hit annual targets. Environmental advocates say automakers have stockpiled credits for future use and won’t have sufficient incentive to sell electric vehicles at affordable prices, preventing the state from meeting its goals for greenhouse-gas reduction.”

Industry anxieties

In Silicon Valley and the Bay Area, the mood has shifted somewhat from optimism to concern, with regional opinion leaders mounting a defense of electric vehicles that allows that the rules around them may well need reform. “Despite Californians embrace of EVs, the state is in danger of not meeting its laudable goal of sales of 15 percent of all new cars by 2025, which would equate to roughly 1.5 million cars,” the San Jose Mercury News editorialized. “It’s especially worrisome that sales of electric vehicles increased by only 1.6 percent in California in 2015, and dropped by more than 10 percent throughout the United States.”

Compounding the problem, Californians with electric cars face the prospect of having their high occupancy lane access taken away — a move that would surely depress zero-emissions sales still further. “One of the most successful incentives to date has been the green-sticker program for plug-in hybrids and the white-sticker program for battery electric and fuel-cell vehicles, both of which provide high-occupancy-vehicle-lane access to these cars,” the San Francisco Chronicle warned. “Consumers have cited high-occupancy-vehicle-lane access incentives as a key consideration in their purchase of an electric vehicle. Both programs are set to expire at the end of 2018, and there are no longer any green stickers available unless the cap is raised by the Legislature.”

World watching

As always, national — and international — eyes remained focused on California’s moves in the zero-emissions market. China, whose central planners have looked to cap-and-trade champions like Gov. Jerry Brown and former Gov. Arnold Schwarzenegger for inspiration, has even formulated regulations patterned after the Golden State’s electric vehicle quota system. “The proposed rules will mandate that certain automakers produce or import new-energy vehicles in proportion to the number of fuel-burning autos they sell,” Bloomberg Markets reported, citing a draft document prepared by Beijing’s National Development and Reform Commission. “Companies that fail to achieve carbon dioxide emission reduction targets would be required to buy credits or pay fines of as much as five-times the average price of the credits, the country’s top industry regulator and policy maker said.”

But in spite of the impressive technology and social vogue powering attention and prestige around zero-emissions cars, in the U.S., electric vehicles have only really taken off along the West Coast. “Of the 13,772 cars with plugs sold last month, 7,161 went to buyers in California,” GreenCarReports noted — “exactly 52 percent, or more than the entire rest of the U.S. combined. With cheap gas sustaining a robust market for the SUVs and crossovers buyers favor — models that rarely come with plugs — sales have fallen short of expectations. 

Nevertheless, regulators have ensured that electric vehicles won’t be disappearing from showroom floors anytime soon. Automakers “know they must both meet the California ZEV mandate — which until 2018 applies only to Fiat Chrysler, Ford, GM, Honda, Nissan and Toyota — and gain experience for future years in which radically lower emissions will be demanded by regulators worldwide,” the site added. “California provides the most fertile market for those vehicles, and the ‘travel provision’ quirk in its ZEV regulations allows a car sold in that state to fulfill ZEV-sales requirements in 10 other states as well.”

“Next week’s special Summit is an exciting occasion for me and other members of President Obama’s Asia policy team because it brings full circle the commitment he made at the start of his presidency to refocus and rebalance our foreign policy to deepen our engagement with the Asia-Pacific region,” wrote Daniel R. Russel at the Department of State’s official blog:

“The President made clear at the beginning that the region’s youthful populations, fast-paced economies, and growing consumer base were important to America’s own economic future. While these qualities are abundant in Southeast Asia, the region’s leaders have long recognized that an additional ingredient was needed for their success – a regional order based on rules.”

Closing ranks

The Obama administration had labored last year to codify such rules in the form of the Trans-Pacific Partnership. But that landmark agreement, signed by the parties earlier this month, has run up against stubborn bipartisan resistance in Congress and nationwide. “Dozens of labor, environmental and consumer groups are urging Congress to oppose the Trans-Pacific Partnership, the 12-nation trade deal that President Obama hopes will be a signature achievement of his administration,” the Washington Post noted. “Meanwhile, business groups and major trade associations are lining up in support of the pact.”

With China posing a growing strategic challenge — but weakening economically — many of the ASEAN countries have looked to the U.S. to take a leading role even without the TPP in place. In California, analysts have followed suit, banking on the possibility of more trade cash flowing the Golden State’s way. “California already conducts a significant amount of trade with the ASEAN countries,” as the Desert Sun reported. “The ASEAN trade block — which comprises 10 countries, including Vietnam, Thailand, Singapore and Malaysia — is California’s fourth largest trade partner after Mexico, Canada and China. But experts say the potential for growth in the region is enormous for California’s industries.”

Dark clouds

Nevertheless, president Obama has weathered criticism over both the summit’s invitees and its agenda. As the military regime in Myanmar negotiated a power transition with longtime dissident Aung San Suu Kyi, its candidate, outgoing president Thein Sein, abruptly canceled his plan to attend the summit, according to Channel NewsAsia. Obama has also taken heat from “activists, opposition party leaders and scholars” objecting to his “decision to include Thai Prime Minister Prayuth Chan-ocha, head of the junta that seized power two years ago,” the Washington Times observed. Concern has arisen “that the former army general will display the invitation as Washington’s endorsement of the military regime.”

In an apparent effort to strike a balance in reassuring domestic and international audiences, the administration released a statement focused on national security advisor Ambassador Susan Rice. “Ambassador Rice highlighted that U.S. support for civil society, good governance, and human rights is a focus area for the U.S. Rebalance to Asia and is a topic President Obama will stress at Sunnylands,” said National Security Council spokesman Ned Price in a statement. “Ambassador Rice reiterated the United States’ steadfast commitment to sustaining and supporting civil society in Southeast Asia and around the world, including through the president’s Stand with Civil Society initiative.”

Adding to the administration’s burdens, meanwhile, North Korea has also cast a shadow over the event, with its recently launched satellite literally looming over California. As the AP reported, one tech analyst noted the device “passed almost directly overhead Silicon Valley” just after the Super Bowl came to an end. “I would put it down to nothing more than a coincidence, but an interesting one,” the analyst wrote. But the technology behind the satellite’s illegal launch “could deliver a nuclear warhead into downtown Los Angeles,” according to Richard Grenell former U.S. spokesman at the U.N., who suggested that “the Obama administration is once again caught without a plan.”

“During an Asian tour last month, Obama invited leaders from the 10-country Association of Southeast Asian Nations (ASEAN) to the Sunnylands resort in Rancho Mirage,” as The Hill reported, noting that National Security Council spokesman Myles Caggins would only characterize the event’s objective as advancing “important conversations about the Asia-Pacific region.”

“The president is pleased the leaders have accepted his invitation to gather at Sunnylands, in early 2016,” Caggins said.

A favorite destination

Observers have speculated for years that the Obamas may opt for a post-presidency move to the Coachella Valley. In two years, The Desert Sun noted, he has visited the desert five times. “Sunnylands is a sprawling 200-acre estate in‎ Rancho Mirage, just outside Palm Springs. The mid-century mansion situated on the property was built by the Annenberg family and is now used by presidents and other public officials as a desert retreat,” as CNN explained.

But the Palm Springs destination carried some geopolitical significance as well. “The choice of Sunnylands is symbolic as the Rancho Mirage retreat there was the venue of an informal meeting between Obama and Chinese President Xi Jinping in 2013 that sought to chart a new way forward in U.S.-China relations but did little to ease tensions,” according to Reuters. “Four ASEAN members — Brunei, Malaysia, Singapore and Vietnam — are also part of the 12-nation Trans-Pacific Partnership trade pact, which is the key economic plank of Obama’s economic and security pivot to Asia in response to China’s growing power.”

International economic politics

The president’s intended pivot has drawn substantial criticism as events in the Mideast siphoned military and strategic resources away from the Pacific. In a particularly divisive controversy, some Republicans and Democrats assailed the Trans-Pacific Partnership as a secretive, pro-corporate deal brokered more as a bulwark against Chinese political interests than as a guarantor of American economic ones. “Vital Republican backing for the deal is waning,” the Wall Street Journal observed. “The party is divided on trade, and establishment Republicans are having a harder time defending the administration’s Pacific deal against outspoken criticism from a number of Republican presidential candidates, including front-runner Donald Trump.” In recent months, even Republican-aligned industry figures have begun to sour on the deal; “business groups including the Chamber of Commerce and Business Roundtable can’t formally begin the job of building congressional support until they iron out deep differences among their own ranks,” the Journal added.

As a result, White House watchers have anticipated a summit aimed at marshaling the kind of international support that Obama could use to try forcing lawmakers’ hands. “Obama’s push for the Trans-Pacific Partnership […] and China’s military aggression in the South China Sea are expected to be among the main topics at the summit,” according to the Washington Post. Several ASEAN countries, the Post noted, “have clashed with China over the South China Sea, a key international shipping lane, where Beijing has constructed artificial islands that U.S. officials fear could be used as military installations. Obama warned Xi about China’s intentions during a U.S.-China summit at the White House in October, and the Pentagon dispatched a U.S. warship within 12 nautical miles of the artificial islands in a challenge to Beijing’s claim on the waters.” The votes of some wavering Republican legislators could be tilted in the TPP’s favor if southeast Asian allies rally around the president.

In the meantime, speculation continued to swirl around the exact scheduling of the event. “Japan’s Kyodo news agency on Monday quoted an ASEAN official source as saying the summit was expected to be held February 15-16,” Reuters reported. “Diplomats from two ASEAN countries said they understood this to be the timing, but it had yet to be confirmed.”

On the work front, the year finished out with weaker, but not alarming, numbers. “California employers added just 5,500 jobs in November, according to federal data — a significant slowdown from more robust monthly gains earlier in the year,” the Los Angeles Times reported. “But the state unemployment rate continued its five-year-long decline, dropping to 5.7 percent in November, the lowest in eight years.” By way of comparison, the nationwide unemployment rate has been hovering around 5 percent.

For a broader view of the economy, analysts looked to other factors. A string of reports reinforced the significance of Silicon Valley to the state’s health, although “red tape, high taxes and a burdensome cost of living” continued to dog Californians statewide, according to the San Jose Mercury News. “In one report, prepared by Beacon Economics for nonprofit group Next 10, a comprehensive look at California’s business climate determined that the Golden State is considerably more hospitable to business than suggested by conventional wisdom that sometimes elevates less costly states such as Texas,” the paper noted. “Another study, the Milken Institute’s annual Best-Peforming Cities Index, found that the San Jose metro area, which includes most of Santa Clara County, is the top performer for 2015.”

Two Californias

The analyses helped paint the picture of a state increasingly divided between a relatively prosperous coast and a more struggling interior. “By about 2 to 1, Californians believe the state is split between haves and have-nots, with slightly more people putting themselves in the latter category,” according to a survey reported by the Times and conducted by the Public Policy Institute of California. “Just fewer than half of Californians believe that the state will experience good economic times in the next year, but 41 percent say the economy will suffer tough times.”

Even cities just a few hours’ drive from Silicon Valley have limped toward recovery in the wake of the Great Recession. “Stockton, Fresno and Modesto were among the country’s 10 weakest performing metro regions in 2009, according to a Brookings Institution study, and in parts of the Inland Empire, 1 out of 75 homes was in some state of foreclosure — the fourth-highest count in the nation,” as the San Francisco Chronicle reported. “While the Bay Area was by no means spared from the recession, the impacts weren’t as stark. All counties in the region recorded lower employment losses than Los Angeles, San Bernardino and Riverside counties. A third of the counties in the Bay Area fared better than San Diego and Orange counties.”

Doubling down

Critics have warned that undue reliance on the seaboard, and on Silicon Valley in particular, would have risky distorting effects on policymakers’ views and deeds. Setting aside Silicon Valley and the Bay Area, for instance, “the Golden State’s employment growth between 2009 and 2014 and real gross domestic product per capita between 2009 and 2013 each drop about 2 percentage points,” as the Hoover Institution’s Carson Bruno observed. “This is a 55 percent reduction in economic growth and a 25 percent cut in employment growth for California without this one region.”

Thanks to the region’s dominance, the Golden State’s budgeting has become increasingly captive to its tax base. “California’s budget is currently in a strong position because of a surge in tax collections, specifically personal income tax collections,” Bruno added. “Without the Silicon Valley-Bay Area, average assessed taxes per capita would have dropped $249 per year since the Great Recession ended or the equivalent of approximately $7.9 billion per year. That is the difference between budget surpluses and budget deficits.”

California’s coastal metropolises have proven especially exposed to the ups and downs of international markets — especially China, where a weakening economy has broken the state’s run of record-setting exports. “California shipments to China in the August-to-October period fell by 11.4 percent, from $4.19 billion last year to $3.71 billion in 2015,” the Sacramento Bee noted. “Shipments declined across the board, from computer equipment to agricultural products.”

“About 33,000 immigrants moved to California from China last year, roughly triple the number who came in 2005,” the Sacramento Bee reported, citing data from the U.S. Census Bureau and the Public Policy Institute of California. “The number of immigrants coming to California from Mexico fell from almost 100,000 in 2005 to just over 30,000 in 2014, a roughly 70 percent decline.”

Long-term shifts in the west coast economy appeared to have influenced the shift, tilting away from so-called “jobs Americans won’t do” to high-tech opportunities that require college or graduate education. “Arrivals from Asia have disproportionately settled in and around Silicon Valley,” the Bee noted, adding that “India, which sent about 29,500 immigrants to California last year, also is poised to overtake Mexico. Some of California’s recent Asian arrivals are college students or long-term workers who eventually may leave the country; others will stay permanently.”

Making money

For that reason, they have remained a target for rhetoric and policy proposals this U.S. election year. But Mexico’s American immigrants have become a political football in a truer sense as well: both teams now wish to have them. In an appearance on WFAA’s Inside Texas Politics, former Mexican president Vicente Fox made the pitch for return migration. “We are building the opportunities in Mexico. We work hard to have jobs for them. We want them back,” he said. “We need them back.” Alluding to the economic rise of China, Fox hinted that Mexico could attract back former U.S. immigrants in much the same way the U.S. draws Chinese newcomers. “At the very end, we have to meet the challenge of the East,” he said. “The East is growing fast. The East is getting powerful.”

Relishing the opportunity to take a signature issue to a world stage, Gov. Jerry Brown had his political work cut out for him in taking California’s approach to environmental policy to the next level amid the United Nations’ so-called COP21 summit in Paris.

Long known for successfully navigating a path between the Golden State’s political extremes when his own agenda called for it, Brown has found himself facing a complex, shifting set of constituencies at home. In Paris, he has sought to present a policy vision capable of satisfying most, if not all. 

An international turn

To his left, Brown has confronted activists and advocates displeased with the limits of his approach. While Brown peeled away cap-and-trade funds for his beloved high-speed rail project, the environmental left cried foul. (At the end of a speech in Paris, Brown was even “heckled by a group of protesters opposed to carbon offset programs they said could hurt indigenous people,” as the Sacramento Bee observed.) But to his right, within his own party, Brown has had to contend with moderate and electorally vulnerable Democrats who refused to go along with this year’s ambitious legislation to slash emissions yet further, as CalWatchdog previously reported.

Although the bullet train has been hamstrung by environmental impact and other concerns, Brown has found in the Paris talks a way to dramatize both the significance and workability of his plans on climate. By pressing ahead with regulations that won the approval of enough Democrats and the acceptance of enough Republicans, Brown positioned himself as the global leader in actually implementing a large-scale emissions policy. Consequently, as the Los Angeles Times noted, “California officials have rolled out the welcome mat in the last two years for representatives from more than three dozen countries — including China, Kazakhstan, France and Abu Dhabi [United Arab Emirates]. And with a slew of agreements with foreign leaders, Brown and administration officials have turned California’s Air Resources Board and Environmental Protection Agency into de facto diplomatic organizations.” For Democrats, Brown’s initiative and prestige has struck a reassuring contrast with Washington, where Congress has not looked to California as a model.

Dodging conflict 

Even for Republicans, Brown’s approach has avoided some major political hangups. Although few in the party, even in California, have embraced an emissions agenda as aggressive as Brown’s, his state-and-local-first strategy has enabled him to largely bracket traditional Republican opposition to handing the federal government sweeping new powers around regulating carbon. “We don’t have to wait for the federal government to say jump. We’re already moving,” he told Time. 

“The Compact of States and Regions, a consortium of sub-national governments from six continents, announced commitments on Dec. 6 to cut greenhouse gas emissions by a cumulative 12.4 gigatons by 2030 when compared to business as usual projections,” the magazine noted, adding that the entire United States emits between 5 and 6 gigatons each year.

Of late, state Republicans have complained that terrorism should take political precedence over climate. “Climate change has ebbed and flowed for eons. Mankind can deal with it intelligently. But I have serious doubts about our resolve in dealing with terrorists,” said state Sen. Jim Nielsen, R-Roseville, according to the San Jose Mercury News. But the reaction to Brown’s doings in Paris has been muted. 

Brown’s transcendental spiritual sensibility has also shown the ability to shield him from more vociferous Republican criticism. “Modernity has two major elements: individualism and oil,” he also told Time. “And those two we have to transform.” Not typical GOP talking points — but of a piece with the wave of Silicon Valley innovation that has been defined in large part by the sharing economy on the one hand and vast leaps in alternate-energy transportation on the other. California Republicans have not been afraid to show their political support for sharing-economy and transportation stalwarts like Airbnb and Uber, who have repeatedly run afoul of the municipal officials and state regulators often accused by the state GOP of stifling job growth and economic productivity. 

“Facing criticism from opponents for the lack of private investors lining up to finance the $68 billion project, the rail authority asked private firms to respond to a list of questions on how to reduce costs, speed up construction and attract more private-sector investment for a segment from Merced to Burbank, which is scheduled to start operating in 2022,” ABC News reported.

Political challenges

Although the interest has not fundamentally altered the political calculus or the political controversy surrounding the embattled scheme, it has given fans of the bullet train some evidence that it could be more than a sinkhole for public funds.

But the Rail Authority has struggled to convince Californians in many communities that the upheaval promised by the train’s construction and operation are worth the added services. In preparation for a public forum on the so-called Peninsula segment of the line, running through Silicon Valley, the Authority said “it is planning to blend high-speed trains with Caltrain from San Francisco to San Jose to minimize the disruption to local communities,” according to the San Jose Mercury News.

The China connection

California has become something of a proving ground for high-speed rail, with interest running high among some of the most powerful companies and countries in the world.

Elon Musk’s hyperloop design for ultra-fast vacuum-powered mass transit has spawned a test track that will parallel a stretch of the same I-5 freeway intended to guide the state-funded bullet train Gov. Brown has long supported.

And China, one of the biggest international players in high-speed rail, has done its best to become a key player in California’s deployment of the technology. Among the 35 respondents to the Rail Authority’s solicitation for private funds was a group called the Chinese High Speed Rail Delivery Team, the AP reported. Additionally, the Chinese government’s railway conglomerate aced out rival Japan for the state’s other major rail project, the XpressWest train that would connect Las Vegas to Los Angeles commuters willing to take a modest trek to its westerly terminus.

Both moves have taken shape as part of a broader effort by China to establish a big tech-driven infrastructure footprint in the West. “Electric cars from Faraday Future, a project linked to Chinese tech conglomerate Leshi Internet Information and Technology, could roll off a production line in North Las Vegas,” the Las Vegas Sun reported, “if a rumored tax incentive passes a special session of the Legislature that Gov. Brian Sandoval may call. “Sandoval also plans to embark on a trade mission to China in October, to visit Xi’an, Nanjiang, Shanghai and Beijing with governors of other Western states to drum up business in clean technology, taking advantage of the country’s recently announced cap-and-trade program to limit carbon emissions.”

In the meantime, China has kept its eye on the level of interest surrounding the state’s high speed rail endeavor. Reporting on Morales’s reaction to the responses, Shanghai Daily noted that “[a] few of them expressed their interest in helping build the whole Initial Operating Segment (IOS) […] in a package including the civil works, track, infrastructure, stations and rolling stock. But more of them are focusing on one or a few elements, Morales said.”

More specifically, credit — $100 million worth — goes to China Railway International USA, a venture spearheaded by Beijing’s national railroad, China Railway. The consortium has ponied up funds for XpressWest, “the transportation arm of Marnell Companies, a gaming resort development firm,” as the Sacramento Business Journal noted.

Formerly known as DesertXpress, the company has labored to send a high-speed track toward Las Vegas since “at least 2007,” reported the Los Angeles Times.

According to Chinese officials cited by the Times, passengers would travel “a 230-mile route with an additional stop in Palmdale and eventual service throughout the Los Angeles area using some of the same track that would be used by the publicly backed California high-speed rail project.” Past plans envisioned a run of 185 miles alongside I-15.

The logic behind the idea drew from some straightforward numbers. “About one-quarter of Las Vegas’s 41 million visitors in 2014 came from Southern California, according to the Las Vegas Convention and Visitors Authority, many via a several hour highway drive,” Quartz noted. Vegas has been without a passenger train since Amtrak shut down its Desert Wind line in 1997.

Logistical doubts

This  train, which would share track with California’s state-funded high-speed rail, has run into its own version of a problem plaguing that track: reaching Los Angeles proper. “The project has the approval to cover about 190 miles from Las Vegas to the California desert city of Victorville, about 100-mile drive northeast of Los Angeles. It hasn’t broken ground. The project still needs government permission to connect with Southern California’s population centers,” Fox News reported.

“The project currently lacks permission to connect with the state of California’s planned high-speed rail project at a station to be built in Palmdale, 50 miles west of Victorville. A mountain range and about 50 more miles separate Palmdale from downtown Los Angeles.”

Skeptics quickly emerged with unflattering questions about the logistical constraints that could be imposed by the train’s pathway and travel times. “Anybody in L.A. keen to drive to Victorville to pay $89 to take an 80 minute ride to Vegas on a high-speed train?” tweeted Bloomberg View’s Adam Minter.

Adding to the speculation, estimates emerged that the train would require far in excess of the $100 million the Chinese have so far made available. “China’s CRRC Corp’s unit along with its peers from China will implement the rail corridor project at an estimated cost of $5 billion,” the Venture Capital Post noted.

Marshaling support

As yet, American officeholders have remained cagey. Nevada Gov. Brian Sandoval said he hadn’t learned any details about the plans. “But in 2009,” according to the Las Vegas Review Journal, “the XpressWest project drew a key supporter: U.S. Sen Harry Reid, D-Nevada. ‘Senator Reid has been a cheerleader on this project for many years,’ Reid spokeswoman Kristen Orthman said Thursday. ‘He’s glad to see this progress and remains committed to assisting as needed.'”

And the Chinese government appears to have a firm interest in seeing the project to completion. Beijing created CRRC with the specific purpose of throwing the country’s considerable industrial weight around in foreign territories. “The merger of China’s two largest state-owned rail equipment makers has created an industry behemoth, second only to General Electric in size, that will be competing aggressively for projects across Africa, Southeast Asia, and Latin America,” Quartz observed. “China, once a major importer of rail technology, wants to be a world leader in high-speed rail, with projects that span the globe, focusing especially on emerging markets.”

But growth in the U.S. has also been marked as a priority. An employee of the conglomerate told Caixin online that the company “views China Railway International USA an important part of its plan to expand abroad.”