Chinese investment in California is expected to reach $60 billion by 2020, a report released on Friday in Beijing by the New-York based Asia Society said.

The report also called for less protectionism as China’s investments in the US grow.

The report said that California should serve as an example to help solve national anxieties in the US over China, as the growth in China’s direct investment in the country has rekindled old arguments about foreign firms and the national interest.

According to the report, California has already attracted more investment projects from China than any other US state but remains fifth in the nation in terms of total investment value.

Compared to the rest of the US, Chinese investment in California is disproportionately from private rather than State-owned enterprises, greenfield projects rather than M&As, and strongest in high-tech and the service sector — areas that the Chinese government and private sector have targeted for accelerated growth, the report said.

Of the $1.3 billion in Chinese investment in the state, Southern California leads with 69 deals totaling $618 million since 2000. The San Francisco Bay Area and Silicon Valley/South Bay regions are the second and third most attractive regions for Chinese investors.

"California has been the leading edge of America’s Asian economic engagement for nearly 200 years, so it is not surprising that the state is one step ahead when it comes to hosting direct investments from China,” says Daniel H. Rosen of the Rhodium Group, one of the authors of the report.

"What is more surprising is just how much further the Golden State can benefit from China’s new commercial outflows if it gets serious about courting them,” he said.

"California’s private sector has been a strong leader in bringing Chinese investment to the state,” said Jack Wadsworth, co-chairman of the Asia Society Northern California. “We need state government to make the same commitment.”

While security screening for foreign investments is both necessary and legitimate, concerns can be politicized for protectionist ends, the report noted.

California has more self-interest than any other state to step up and contribute to solutions based on its experience with successful, and failed, deals and a sophisticated understanding of cutting-edge industries, said the report.

The report’s global release, including a full Chinese-language version, took place on Nov 15 in Shanghai and on Nov 16 in Beijing. The report was released in the US on Oct 10 in San Francisco and Oct 11 in Los Angeles.