China, US need tackle market access issues before presidential election gets in the way: analysts
The world’s two largest economies are expected to continue negotiations during two-day talks in Washington
China and the United States need to tackle thorny market access issues “as soon as possible”, or the Obama administration will face more domestic pressure during negotiations with Beijing over a bilateral investment treaty (BIT) ahead of the 2016 presidential election, analysts say.
The world’s two largest economies are expected to continue negotiations on market access during the two-day Strategic and Economic Dialogue (SED), which begins on Tuesday in Washington, after the two sides swapped the negative lists for BIT on June 12.
The lists outline which sectors of each economy will be closed to the other side’s investors. In principle, investors will be able to invest in all sectors not on the lists without requiring advance approval by the other side’s government.
At present, China bars foreign capital from more than 35 sectors, including media, consulting on Chinese legal issues, and armament manufacturing. There are also restrictions on foreign direct investments – such as bans on full foreign ownership – in banking, insurance, securities and a further 35 sectors.
“The US side thinks China’s list is too long, and their concerns are understandable given the vast differences between the two economies,” said Wang Yong, an international relations professor from Peking University, who is also a consultant for Asian Development Bank.
“China is expected to trim the list, especially in the high value-added service industry, banking, insurance, and securities services for instance,” he said.