China, US to focus on length, quality of negative lists in investment treaty talks

WASHINGTON -- China and the United States will focus on the length and quality of negative lists that outline sectors closed to foreign investment during the next two rounds of negotiations on a bilateral investment treaty (BIT), a senior Chinese official said Tuesday.

"During the latest 19th round of negotiations, the two sides exchanged the initial offers of negative lists," Zhang Xiangchen, deputy China International Trade representative and assistant minister of commerce, said at a press briefing through a translator on the sidelines of the seventh round of China-US Strategic and Economic Dialogue (S&ED) starting Tuesday in Washington D.C.

"The negative list itself is a major progress in the negotiations, and both sides described it as a milestone event," Zhang said, noting that it will "fundamentally change foreign investment administration regime" and "substantially facilitate foreign investment" in China.

"The next issue will be the length and quality of the negative lists" after both sides exchanged initial offers, Zhang said, adding that both countries expressed their willingness to "have further progress" on BIT negotiations and make the negative lists "shorter and better".

The investment treaty talks began in 2008 as China and the US sought to increase mutual investment, which only accounted for a tiny share of their respective overseas investment.

It was not until the 2013 S&ED meetings that the talks entered a substantial phase after the two countries agreed to conduct negotiations on the basis of pre-establishment national treatment with a negative list approach.

Yukon Huang, a senior associate in the Asia Program of the Carnegie Endowment for International Peace, said it is necessary to realize that both sides want to have a BIT, as it will help address a number of investment concerns between the two countries, and investors from both sides will get better access to each other's markets.

BIT is also very important for moving forward China-US economic relations as "it is only the documentary agreement dealing with international economic issues between the United States and China in the foreseeable future," Huang told Xinhua.