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Chinese investment is finally heading where it’s really needed: Oakland – Quartz

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Lending has shot up in China (again). Data released earlier today show that banks issued 1.06 trillion yuan ($171 billion) in loans in March (paywall), up from 620 billion yuan in February. Aside from the risks of more loans going bad, this is fueling a huge and ongoing problem with overcapacity: China is building more factories (and infrastructure projects) when it already has too many. As Michael Pettis, a Beijing-based economist, explains, the country “is producing far more of everything than it can absorb or export, but the only way to keep growth high has been to invest even more, at least part of which creates even greater production capacity.”

That’s why it’s a relief to see Chinese companies looking to places outside China—like, say, the 12th-largest economy in the world, the state of California. Beijing-based firm Zarsion Holdings is ponying up an undisclosed chunk of a $1.5 billion makeover of Oakland’s waterfront. Since it’s a real-estate and investment firm, Zarsion will be involved in the property development, as well.

Mayor Jean Quan said the project will generate an estimated 10,000 jobs over the course of 8-15 years, and indicated that the investment was part of a larger trend. “We’re starting to see more aggressive investments in the U.S. by the Chinese and we’re hoping we’ll have more Chinese investments in Oakland in the future,” she said.

California is only the 12th biggest economy in the world?!

Seriously though Oakland needs the help.

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