Chinese and US officials have said negotiations on a treaty that aims to open up investment in both nations are a major priority for this week's strategic and economic dialogue in Beijing.
But analysts said it could still take a long time to conclude the negotiations because of concerns over national security.
Last year's talks under the dialogue made a major breakthrough: both governments agreed that the treaty would cover all sectors of their economies unless explicitly identified on a so-called negative list, guaranteeing investors from both nations the right to buy, sell and maintain investments without discrimination on grounds of national origin.
Kenneth Lieberthal, a senior fellow of the Brookings Institution's John L. Thornton China Centre, said Beijing's change of attitude toward what could be included in the negotiations signals that it wants to continue economic reform.
"A similar dynamic occurred with regard to China's accession to the World Trade Organisation," said Lieberthal, who participated in the last round of negotiations for the US-China bilateral agreement on granting China's access to the WTO.
"And it was clear to me that Premier Zhu (Rongji) and President Jiang (Zemin) were using accession to the WTO to give them leverage to carry out economic reforms in China that they knew were critical but felt they might lack the political capital to get through without this external set of obligations and related benefits."
Mao Tong, a partner in the law firm Squire Patton Boggs, said the treaty negotiations had become a high-level deal-making process for both nations to demand greater market access.
The investment treaty would provide more certainty for enterprises of both nations to enter the other's markets, he said. "Chinese companies are more active in investing … overseas after the financial crisis in 2008. When US companies demand greater access to the Chinese market, China now can also demand the same [access] to the US."
But Mao said the negotiations would not be easy, with concerns over national security issues looming large and affecting what types of technology transfer will be on the negative list.
Several acquisitions of US firms by Chinese companies, including Superior Aviation Beijing's US$1.8 billion (HK$13.95 billion) offer for Hawker Beechcraft in 2012, have been blocked by the US government on national security grounds.
Patrick Chovanec, chief strategist at Silvercrest Asset Management and a well-known analyst on China's economic affairs, said the differences over the concept of national security and the role of state-owned enterprises would not be resolved easily.
Additional reporting by Kristine KwokMore on this: