Many states in the United States are in financial crisis and are on the verge of bankruptcy. Governors rush to China to make money

Many states in the United States are in financial crisis and are on the verge of bankruptcy. Governors are rushing to China to make money. The anxiety of high debt has truly spread to the official residences of major state governments in the United States, and the growing number of Chinese...

The first governor in American history to win a recall election is Wisconsin Governor Scott Walker. Walker, is more confident than ever that the Chinese market and investment can boost Connecticut’s economy and employment.

Walker recently attended a business visit in Shanghai and emphasized the importance of Sino-US economic and trade exchanges to a reporter from China Business News. "China's economic development will be a good boost to the US market, and vice versa. We encourage US companies to invest in the Chinese market, create jobs, and stimulate economic interaction between the two countries. We also hope that It can drive in-depth trade between China and the United States. "

Many U.S. governors visited China

Data show that the U.S. federal government’s monthly fiscal revenue in March was 186 billion U.S. dollars, and fiscal expenditures for the month were 292.5 billion U.S. dollars. The fiscal deficit was as high as 106.5 billion U.S. dollars, and the overdraft situation continued. During Obama's term, the U.S. federal government's fiscal deficit has exceeded US$1 trillion for four consecutive fiscal years. The high fiscal deficit is a severe challenge facing the U.S. economic recovery.

The anxiety of high debt has effectively spread to the official residences of major state governments in the United States, and the growing number of Chinese funds seeking overseas investment options has recently led to the governors and government officials of many states in the United States competing to bring large delegations, each showing their magic to launch a new round of "money-attracting operations" to visit China. When inspecting Ashley Home Furnishings, a company in the state that operates in China, Walker said that this trip not only successfully prompted Shanghai Milk (Group), a subsidiary of Bright Food Group, to sign a cooperation agreement with relevant research institutions in Connecticut to prepare for comprehensive cooperation in the fields of dairy feed and breeding technology, but Connecticut Miller Electric also announced the export of equipment systems to the Shanghai automobile manufacturing industry.

Earlier, at the first stop of California Governor Jerry Long's visit to China, he obtained US$1.5 billion in capital from Chinese companies to develop large-scale overseas commercial and residential projects in Oakland, San Francisco Bay Area, which is expected to create tens of thousands of local jobs. There is also news that a high-speed rail project worth tens of billions of dollars is under negotiation.

Some state governments in the United States have also established new Sino-US Economic and Trade Promotion and Cooperation Centers in Chinese cities such as Shanghai and Beijing. Walker told this reporter: "The importance of the Chinese market to the United States has become increasingly prominent. This is the first time I have led a trade delegation to visit China, and I am very impressed." It is reported that China is Wisconsin's third largest export market. In 2012, Connecticut's exports to China reached US$1.5 billion, a year-on-year increase of 11.8%.

State Government Financial Difficulties

State governments actively launch "money-attracting operations" to visit China. This is due to the U.S. federal government's drastic spending cuts that automatically took effect in 2013. The reduction in allocations has led to a decline in state government revenue. Previously, the Stockton government in California has filed for bankruptcy. The government of Detroit, the automobile city, is also in financial distress due to debts of US$14 billion and may consider filing for bankruptcy.

Analysts told reporters that if economic activity cannot be actively improved, regional employment recovery is weak, and tax revenues are further reduced, the gap between social welfare expenditures and state government revenue will become wider and wider. In addition, government pension and Medicaid costs will begin to increase, and state governments will fall into a new round of fiscal crisis, which will have a negative impact on the U.S. economic recovery and financial market stability.

The uncertain outlook for state fiscal conditions has a negative impact on financial markets. Recently, funds that have always pursued high returns and loved U.S. closed-end local government bonds have been reduced by investors. The overall price level has gone from a premium of 2.9% at the beginning of the year to a discount of 1.8% today. Morningstar analysts pointed out that investors' interest in U.S. local government bond assets has dropped sharply and even caused panic.

Increasing revenue, reducing deficits, and promoting employment have become the most important issues considered by state governments in the United States. Walker proposed the goal of helping Connecticut create 250,000 jobs by 2015. Previously, due to his sweeping reforms since taking office in 2011, the powerful Republican governor has eliminated the state's $3.6 billion fiscal deficit without raising taxes, saving taxpayers more than $1 billion. Although the Connecticut state government's stringent fiscal budget bill was once met with large-scale demonstrations by labor unions, in the end the impressive economic performance defeated everything.