China, US agree to get down to business with investment talks
Beijing drops efforts to protect certain sectors of its economy in investment talks
The United States and China have agreed to restart negotiations on an investment treaty, with Beijing dropping previous efforts to protect certain sectors of its economy from the start.
The move was welcomed by the US business community as a major advance during the annual strategic and economic dialogue in Washington between the two nations, which produced few agreements of substance.
US Treasury Secretary Jack Lew hailed the investment treaty commitment as a sign of positive change in Beijing as China retools its economic growth model away from heavy investment and exports towards growth driven by consumption.
"China announced its intention to negotiate a high-standard bilateral investment treaty with us that will include all stages of investment and all sectors - a significant breakthrough, and the first time China has agreed to do so with another country," he said.
China and the US began negotiations on a pact to govern investment in 2008 under then-president George W. Bush, but discussions were put on hold after President Barack Obama took office the following year.
Previously, Beijing had agreed to talks only if certain industries, especially in its services sector, were exempt. But it had agreed to drop blanket restrictions, a US Treasury official said.
A report yesterday from the Paris-based Organisation for Economic Co-operation and Development said Beijing still had some work to do to streamline border controls, even though it ranked as one of Asia's most accessible economies in a study that covered 133 countries around the world.
The rankings are based on a set of trade indicators developed by the OECD to help governments improve border procedures, reduce trade costs and boost trade flows. The OECD estimates world GDP would rise US$40 billion if global trading costs were cut 1 per cent.
Commerce Minister Gao Hucheng said China and the United States shared "a common purpose, which is to try to find ways to reduce and mitigate differences and barriers that both sides place in our trade and investment relations".
Explaining China's motives for reopening the investment talks, Deputy Finance Minister Zhu Guangyao said China had about US$20 billion of direct investment in the US and US$1.2 trillion in US treasury bills.
"With such an extensive investment relationship, it is necessary for the two sides to have an institutional environment for the protection of these investments," he said.
"Business leaders from China and the US have a strong desire to invest in the market of the other. They both want an open and more transparent market."
Additional reporting by Celine Sun