- Washington, Beijing to relaunch talks to lower barriers for American companies in China
- U.S. Treasury Secretary: agreement is "significant breakthrough"
- Top U.S., China officials met at fifth annual Strategic and Economic Dialogue in Washington
The US and China are to restart talks on an investment treaty that White House officials believe has the potential to reduce the restrictions that American companies face in China.
Jack Lew, US Treasury secretary, said it was a "significant breakthrough" for China to agree to talks on an investment treaty that would involve every sector of the economy.
The new talks reflect the reality that complaints about investment barriers have become one of the central economic issues between the world's two biggest economies -- shifting attention away from the exchange rate wrangling that once dominated debate.
US and Chinese officials announced the new investment talks at the end of a two-day annual summit between leaders of the two countries, known as the Strategic and Economic Dialogue, which took place this year in Washington.
Gao Hucheng, China's commerce minister, said Beijing was committed to entering "substantive" negotiations, which he hoped would start "as soon as possible". China's willingness to enter the talks comes at a time when its new leadership has pledged to introduce significant economic reforms to open up parts of the economy.
Mr Lew said the negotiation of a "high-standard" treaty with China was "a priority for the United States and would work to level the playing field for American workers and businesses by opening markets for fair competition".
In recent years, US and other foreign companies in China have complained loudly about what they see as a growing wave of restrictions on their activities and investments, including pressure to transfer technologies to Chinese enterprises, and clear preferences towards Chinese state-owned groups.
China has a long list of sectors in which foreign companies cannot invest, or have to do so in a joint venture with a Chinese partner, including autos and much of financial services.
Meanwhile, Chinese companies and officials have questioned whether their investments in the US are welcome. This week, US lawmakers used a congressional hearing to raise concerns about Shuanghui's proposed $4.7bn purchase of Smithfield pork, the largest ever Chinese takeover of a US company.
The two governments began discussion of a bilateral investment treaty in 2008, but the talks did not progress. According to US officials, the discussions are now being revived after China made an important concession about the basis for the negotiations. Every sector will be up for discussion unless one of the governments declares it off-limits -- a "negative list" approach, which Washington had long called for.
News of the revived talks was strongly supported by US business groups, which have long argued that an investment treaty could help reduce some of the obstacles their members face in China. Myron Brilliant, executive vice-president of the US Chamber of Commerce, said the "devil will be in the detail and the implementation". However. the talks were "an important opportunity to address impediments in the economic relationship and to build trust".
John Frisbie, US-China Business Council president, said a treaty "provides one of the best opportunities to reduce investment barriers in both countries and improve protections for US and Chinese investors in each others' markets".
China has also agreed this year to revise its offer for signing up to the World Trade Organisation's agreement on government procurement rules.