The state of California and six of China's largest and fastest-growing regional economies will establish a trade partnership as the two countries further economic cooperation at the local government level.

On Wednesday, California Governor Jerry Brown, who is leading a delegation of more than 70 businesspeople in China, signed a Memorandum of Understanding in Beijing with six Chinese provinces, municipalities and an autonomous region. The six include Guangdong, Jiangsu, and Shandong provinces; Shanghai and Chongqing municipalities; and Inner Mongolia, the fastest-growing region in China.

President Xi Jinping initiated the agreement during his visit to California last February when he was still vice-president.

"(The working group) is an important part of implementing the consensus that the two countries reached during that visit," said Wang Chao, vice-minister of commerce, at the signing ceremony.

He believes that by 2020, there can be "hundreds of billions" of investments in California.

The agreement will promote investments and cooperation in infrastructure, new energy, biopharmaceuticals, electronics and information technology, agriculture and tourism.

Brown said California faces many challenges and problems and it wants to have more partners and opportunities, which is why he came to China. California's strengths lie in the high-tech sector as well as agriculture, biopharmaceuticals and low-carbon industries; China has advantages in areas of high-speed railway, solar energy and batteries for electric cars.

"We are totally open to China - it's about jobs, and it's about investment," Brown said.

Zarsion Holdings Group Co, a Chinese investment group, said after Brown's signing that it will finance a $1.5 billion real estate project in Oakland, an unusually large investment by a Chinese company in California.

The investment is estimated to be worth more than $1 billion over the next 8 to 10 years. The project is to include the construction of 3,100 housing units, 200,000 square feet of retail and commercial space and 30 acres of parks and open space, located to the south of Jack London Square.

Michael Ghielmett, president of Oakland-based Signature Development Group, said construction will begin next year.

Last week, Chinese carmaker BYD said it will start building a factory to produce electric buses in Lancaster, California, in May.

Shanghai and California will both open trade offices in each respective region. Shanghai has also agreed to encourage its businesses to develop sales networks in California. Inner Mongolia, which has rich resources and major agriculture and clean energy mineral industries, will increase cooperation with California in farming and husbandry, and the development of new energy.

California accounts for one-fourth of the total trade between the two countries and one-third of the imports from China. It is also the American state with the most investment from China at $1.4 billion last year.

"Economic and trade relations are the most important parts of the positive push for China-US relations," Wang said.

"The Chinese local governments and the US states show strong willingness, and are highly motivated to enhance economic and trade relations," he said.

In 2012, China-US trade reached $484.7 billion. China's cumulative outbound direct investment in the non-financial sector in the US reached $10 billion by the end of 2012, while cumulative US direct investment in China stood at $70 billion.

More than 70 US companies from California and around 100 Chinese entrepreneurs attended Wednesday's business exchange conference.

Dominic Ng, chairman and CEO of East West Bank, said: "The US restrictive measures against Chinese investment is only one side of the issue; the majority of American state governments are more than welcoming to Chinese investment as they want jobs and economic growth.

"We see golden opportunities in the next decade for China's investment in the US," he said.

Gao Lei, an official at Qingdao-based trading company Hiking Group, said his company is interested in investing in mining and high-tech sectors in the US, but has faced difficulties in legal services, strategic consulting and finance.

He believes that with the closer cooperation and the joint working group in place, his company will be able to make easier and faster decisions on investments in the US.

Contact the writers at dingqingfen@chinadaily.com.cn and liaoxue@chinadaily.com.cn