China Is Sold on Schwarzenegger

Even in China, where local Communist Party officials asked for his autograph, California Gov. Arnold Schwarzenegger could not escape being master of a traveling celebrity opera in which politics frequently gave way to simply being famous.

Schwarzenegger ended his six-day trade mission to Beijing, Shanghai and Hong King on Saturday without any substantial business agreements for California firms.

A Riverside County pump company could soon have an announcement on expanding its China business. And there may be news from Aeros, a Tarzana blimp maker already established here. That company wants to sell more dirigibles to the authoritarian Chinese government for police surveillance, among other uses.

But the governor’s trade mission to China mostly drew crowds of jostling paparazzi, government officials and business executives there to see the Terminator.

Today, on the streets of Hong Kong, the trip closed as it began six days ago: with a barely controlled mob scene as he toured two markets. “You have never seen so many cameras,” Schwarzenegger said to a stunned-looking store manager as the crowd clamored for his photograph or just a glimpse.

Combating the bootlegging of movies, medicine and other American products meant standing in front of a 20-foot-high photograph of himself in leather pants and a black T-shirt. It was the official unveiling of a new Hong Kong public service television advertisement with action star Jackie Chan.

“You and I are on a mission to stop piracy.... Let’s terminate it,” Schwarzenegger says to Chan in the ad as they ride motorcycles along a California street, swerving to avoid exploding, toppling cars.

Schwarzenegger later announced that the ad -- directed by Jonathan Mostow, who also did “Terminator 3: Rise of the Machines” -- would be viewed by 1 billion people. In fact, aides explained, that was wishful thinking: The Chinese government has yet to approve its showing outside of Hong Kong, Macao and a few satellite services.

The night before, on the second anniversary of his inauguration, an elaborate reception at the Shanghai Art Museum featured a slick video of Schwarzenegger “selling California.” It started with a clip from NBC’s “Tonight Show With Jay Leno” on which he announced his decision to run for governor.

Outside, paparazzi and Chinese television reporters lined up along a red carpet for the premier of “Harry Potter and the Goblet of Fire,” the first showing in China before it inevitably winds up as a pirated DVD. Schwarzenegger and his wife, Maria Shriver, were the only people to walk the carpet.

The governor is well aware that his celebrity status can become the dominant paradigm in any situation. He’s counting on it. He sees his notoriety as his most potent asset in bringing people together, closing deals and energizing politics.

“In my case, the show comes automatically,” Schwarzenegger said in an interview here. “That gives me much more power of influence to get results.”

But behind the scenes throughout the trip to China, Schwarzenegger’s aides have scrambled to find deals for California companies to announce.

Schwarzenegger himself declared before returning home that the trip “was about substance,” but his aides said only that ground had been broken on a few small deals.

Mark Mosher, executive director of the California Commission for Jobs and the Economy, which organized the trip, said a photo op between the governor and executives from two Shanghai companies led to possible agreements to build small manufacturing facilities at Tejon Ranch north of Los Angeles.

Tejon Ranch is a “free trade zone” that allows foreign companies to get a foothold in the U.S. and receive tariff reductions on exports in exchange. Mosher said the deals could lead to 500 light manufacturing jobs in California.

“We’re hoping we push them over the top,” Mosher said.

Not that the 80 or so business executives on the Schwarzenegger trip were disappointed about the lack of flashy deals. Most said they had realistic goals about how much they could increase the estimated $7 billion in goods that already flow from California to China every year.

Robert P. Koch, the brother-in-law of President Bush and chief executive of the Wine Institute of California, said he got a “much better understanding of the potential market for us” while traveling with the governor. Looking relaxed and prosperous, Koch sipped wine as he made his way around the Shanghai art gallery reception.

“This is going to take time,” said Koch, who is married to the president’s sister, Dorothy Bush Koch. “Interestingly, a healthy percentage of the Chinese people don’t even know California makes wine. It’s a long-term process as it relates to China.”

Other California executives said they were happy that Schwarzenegger’s celebrity opened doors in China. Janet Lamkin, president of the California Bankers Assn., said she sat down with about 15 executives from Chinese banks in a private round table to discuss liberalization of banking laws; Schwarzenegger stopped by.

“It would take us an enormous amount of time and legwork to put that together, if we even could put it together,” Lamkin said. She said the meeting laid the groundwork for cross-bank deals.

Schwarzenegger traveled through China by private jet, carrying an entourage of at least 50 staff members and bodyguards. He made his way through Shanghai and Beijing in a fleet of Cadillac Escalades. He stayed at the finest hotels, including the Ritz-Carlton in Shanghai.

The trip, estimated to have cost hundreds of thousands of dollars, was paid for by corporate donations to four funds. The Schwarzenegger-Chan public service ad was paid for with about $120,000 from the Hong Kong government and in-kind donations from Universal Studios. A final accounting is expected to be available after the mission, administration officials said.

Along the way, it was clear Schwarzenegger had a difficult path to tread despite his skills as a salesman. The governor said he noticed that “even among our own trade mission, people have been going to the shops and buying” fake American products that are so easy to find, among them handbags and clothing.

In Beijing, Schwarzenegger and Shriver attended another lavish reception to highlight products from California, particularly luxury goods for a new group of middle-class and wealthy Chinese. As the cameras snapped, the celebrity couple emerged on stage from a “made in California” cargo crate and then watched a fashion show.

In an interview before the show, Max Azria, a prominent designer from Los Angeles, said he wasn’t worried about copies of his designs, saying they would mean he is successful: “If they don’t knock you off, it means you’re no good.”

And jewelry and fashion designer Chan Luu, also from Los Angeles, described being ripped off as “part of our business. So you move on. Knock offs are very flattering.”

In a speech to the American Chamber of Commerce in Hong Kong, Schwarzenegger estimated that $250 billion in U.S. goods are ripped off every year. “You are not going to erase the problem one year to the next,” Schwarzenegger acknowledged. “But if you just eliminate 5%, that is a huge amount of money.”

Despite the celebrity nature of his trip, California politics still followed Schwarzenegger to China. At the unveiling of the Schwarzenegger-Chan public service ad, moderator Bernard Lo of Bloomberg TV told the governor: “Maybe you can take Jackie with you next time you take a referendum to California voters.”

Some in the audience gasped. Others laughed. The governor simply smiled.

Throughout the trip, Schwarzenegger maintained that his personality could sell anything, even though he wasn’t so successful during the special election last week.

“If we can have as much success with our trade mission as I have had in the past with the movie business,” Schwarzenegger said in Hong Kong, “then we should be quite successful.”