'Stage set' for more talks on economic ties
Cary Huang in Beijing
Analysts hailed the launch of negotiations on an investment treaty in the just-ended China-US 'strategic economic dialogue' as a major breakthrough, setting the stage for the next US administration to continue the discussions.
But little substantial progress was made in the fourth round regarding currencies and trade, which Washington has been complaining about - and pushing Beijing for concessions on - in the previous rounds of talks.
US Treasury Secretary Henry Paulson, who led the American delegation, said such a treaty would send a strong signal that 'our two nations welcome investment and will treat each other's investors in a fair and transparent manner'.
Huang Yiping , chief Asia economist with Citigroup, said the treaty - when concluded - would prove more important to China than to the US, where rising protectionism and the political sensitivity of allowing China's state-owned enterprises to invest in the US were issues.
'While there is no political problem for US firms to invest in China, there are often problems for Chinese companies - most of them state-owned - to invest in the US,' Mr Huang said.
Jing Ulrich, chairman of JP Morgan's China Equities, described the negotiations on the treaty as signalling the deepening of the relationship between the two countries.
Guo Xiangang , of the China Institute of International Studies, a think-tank affiliated with the Foreign Ministry, said the launch of negotiations would set the stage for the next US administration, whichever party won the election, to continue the dialogue.
Leading Democrats are already warning the administration of US President George W. Bush not to conclude any new arrangements for investment safeguards and trade that could tie the hands of future governments.
Any treaty with the US requires a two-thirds vote by the Senate, a potential hurdle if Democrats retain their majority.
'The dialogue would continue, but negotiations on the investment treaty might become tougher,' said Professor Guo, who is also editor-in-chief of the Journal of International Studies.
Professor Guo also predicted that the exit of Mr Paulson, former chairman of Goldman Sachs, would not reduce the momentum of bilateral talks. He said there were similar worries when Vice-Premier Wang Qishan replaced Wu Yi as chief negotiator.
The latest round saw China make few concessions on issues of currency and trade.
Jin Canrong , associate dean of the School of International Studies at Renmin University, said the key would be how Beijing's policymakers continued the dialogue with the next administration to keep relations improving.
The economic dialogue was launched by President Hu Jintao and Mr Bush in 2006.
Mr Paulson said he expected to hold the fifth in a series of these meetings in China in December.