$100 Million of Asian Money to Flow Into State

The state’s newly established trade office in Japan has helped to steer $100 million worth of new investment into California from Asia, Gov. George Deukmejian said Thursday.

The governor, who is hosting a two-day Pacific Rim Roundtable in Los Angeles, said the new direct investment will mean about 2,000 new jobs for California workers. Deukmejian made the disclosure in a question-and-answer session with reporters.

A list of the investments, made available by the state Department of Commerce, showed about 18 new plants or offices are planned, mostly for Southern California.

The investments ranged in amount from $100,000 to $20 million in various industries including ceramics, auto components and personal care products.

Making Good on Promise

The investors were not identified at their request, but sources said they were mostly Japanese. Kyocera, for example, is spending $20 million and creating 500 jobs to expand its ceramics plant in San Diego, the sources said.

The governor’s disclosure was the first indication that Japanese companies, which lobbied hard for the recent repeal of the state’s taxation of multinational firms, are making good on their promise that they would look more favorably on investing if the tax was changed.

Under the 50-year-old unitary tax system, California levied taxes on multinational firms based on their worldwide profit. Under the new, so-called water’s edge system that goes into effect next year, firms can pay a fee and have their taxes based on U.S. profit.

When the governor visited Japan in January, he warned the Japanese of the possibility of returning to the old method if they did not significantly increase their investments in the state and open their markets to more imports.