NewUS-China Diplomacy 101: A dummy’s guide to political jargon used in Xi Jinping’s US state visit
What’s this “new type of great power relationship” that the papers having been going on about? What do BIT, TPP and FTAAP stand for? Read on and we’ll tell you…
BIT
A bilateral investment treaty, known as a BIT, is an agreement between two countries that sets up binding rules for foreign investment in each other’s markets.
A BIT between China and the United States gives the two countries’ companies better access to each other’s markets by lowering the barriers to entry for foreign investors. The treaty ensures the foreign investors are treated in the same way as are domestic companies – a right known as “national treatment”.
Under the treaty, Chinese and American firms will be able to invest in all sectors and industries in each other’s countries, except those explicitly excluded in a “negative list” negotiated between the two parties.
Sino-US BIT negotiations have been underway since 2008, but did not make much progress until July 2013, when both sides agreed to adopt pre-establishment national treatment and a “negative list” approach.
Last week, Beijing and Washington exchanged revised offers of the negative lists. Chinese state media have talked up the prospect of progress in the treaty negotiations during President Xi Jinping’s US state visit, but observers say it would be hard for the two countries to reach an agreement so soon.