China-US investment treaty on fast track

Updated: 2014-07-10 06:52

By Li Jiabao(China Daily)

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China-US investment treaty on fast track
L-R: United States Treasury Secretary Jacob J. Lew, US Secretary of State John Kerry, Chinese Vice-Premier Wang Yang and State Councilor Yang Jiechi attend the opening ceremony of the sixth China-US Strategic and Economic Dialogue in Beijing on Wednesday. PHOTO BY XU JINGXING / CHINA DAILY

Negotiations for an investment pact between China and the United States are expected to make whatone official called “a breakthrough”, which would help shape investment activities between the world’s top two economies, as well as with other countries.

China and the US will announce the timetable for the Bilateral Investment Treaty talks on Thursday, which will be part of the fruit of the sixth China-US Strategic and Economic Dialogue, Zhang Xiangchen, China’s assistant minister of commerce, told a news briefing on Wednesday.

The annual dialogue, known as the S&ED, is being held in Beijing on Wednesday and Thursday. It serves as a highlevel platform for the two countries to exchange views on a wide range of issues, including macroeconomic policies, trade and investment and climate change.

During the opening ceremony of the S&ED, President Xi Jinping called for both sides to accelerate the negotiations to establish “a high-level and balanced investment pact as soon as possible to boost Sino-US economic ties”.

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Zhang said the Sino-US investment treaty negotiations have made active progress, which is a highlight of bilateral economic relations.

Both sides will speed up the pace for the talks.

"Owing to different economic development levels between the two countries, we can expect difficulties will emerge on the talks on many terms, but the pact will be finally reached,” Zhang said.

The two sides resumed negotiations in July 2013 for a pact to incorporate national treatment for both new and existing investments, while having a “negative list” of investments that are excluded. The 13th round of negotiations was held in Beijing from June 9 to 13. The 14th round will be held in Washington DC in late July.

"The timetable will be a breakthrough for the BIT talks, which have lasted for a long time and have concluded the easy parts,” said Chen Fengying, director of the Institute of World Economic Studies at the China Institutes of Contemporary International Relations.

"Once the road map is set, the talks are likely to be concluded before the end of this year.”

Chen added that the establishment of the Sino-US BIT will be “the biggest leap” in bilateral economic ties since China’s accession to the World Trade Organization in 2001.

The pact will protect investors’ interests as well as facilitate investment activities by lowering the thresholds.

China’s non-financial direct investment in the US reached $17.42 billion by the end of May, Zhang said. He urged the US to provide a level playing field for Chinese enterprises and remove barriers such as national security reviews, which led to losses for Chinese businesses and dented investment confidence.

"The success of the Sino-US pact will set an example for the ongoing investment treaty talks between China and the European Union, which could thus be concluded next year. Other economies can also follow the example,” Chen said.

The EU is China’s largest trade partner, followed by the US. Sino-US trade rose 7.5 percent year-on-year to $521 billion in 2013, about one fifth of the world’s total, while two-way investment exceeded $100 billion, according to the ministry.

"China’s strategy for the investment treaties will bring the country a similar effect as its joining the WTO. The country will win more initiatives in forging global investment rules and regional trade agreements,” Chen said.

China is expected to be a net investor this year, with outward investment to exceed investment inflows, according to the United Nations Conference on Trade and Development.