US, China commit to investment pact talks
Thursday, June 19, 2008
THE United States and China have agreed to launch talks to forge a bilateral investment treaty aimed at promoting open markets, fair treatment, transparency and the rule of law, officials said yesterday.
"The United States and China have agreed to launch negotiations for a bilateral investment treaty," an administration official said ahead of the conclusion yesterday of the senior level US-China Strategic Economic Dialogue in Annapolis, Maryland, east of Washington.
The accord will be based on a model text underlining a "high standard of investor protection", the official said, speaking on condition of anonymity ahead of a formal announcement at the end of the two-day talks. Washington and Beijing have been talking for more than a year on the need to formally start negotiations for a bilateral investment treaty.
Benefits of an investment treaty include enhanced and non-discriminatory market access for investments, more transparent laws, and guarantee of due process for investors.
American companies fear that China's interest in foreign investment is no longer as robust as before, that foreign investment regulations are opaque and seem to be designed to favour Chinese "national champions", US officials said.
These concerns include Beijing's implementation of the new anti-monopoly law, protection of specific Chinese competitors rather than competition in general and treatment of foreign firms more harshly than Chinese firms, they said.
Chinese investors are reportedly concerned about a US investment review process that Washington says is targeted to address acquisitions that raise real national security concerns.
"A bilateral investment treaty would provide additional protections to investors from each country and the other country and goes beyond what was in the World Trade Organisation entry agreement, for example," US-China Business Council President John Frisbie told AFP.
"It can provide additional protection to the Chinese investors in the US and at the same time could also deal with some of the issues facing US companies that invest in China as well," he said.
The US side to the Annapolis talks was led by Treasury Secretary Henry Paulson and the Chinese team by Vice-Premier Wang Qishan.
On Monday, US and Chinese firms signed 35 business deals in Washington. The deals, worth more than US$8.3 billion, were timed for announcement just ahead of the economic talks. AFP, Reuters
"The United States and China have agreed to launch negotiations for a bilateral investment treaty," an administration official said ahead of the conclusion yesterday of the senior level US-China Strategic Economic Dialogue in Annapolis, Maryland, east of Washington.
The accord will be based on a model text underlining a "high standard of investor protection", the official said, speaking on condition of anonymity ahead of a formal announcement at the end of the two-day talks. Washington and Beijing have been talking for more than a year on the need to formally start negotiations for a bilateral investment treaty.
Benefits of an investment treaty include enhanced and non-discriminatory market access for investments, more transparent laws, and guarantee of due process for investors.
American companies fear that China's interest in foreign investment is no longer as robust as before, that foreign investment regulations are opaque and seem to be designed to favour Chinese "national champions", US officials said.
These concerns include Beijing's implementation of the new anti-monopoly law, protection of specific Chinese competitors rather than competition in general and treatment of foreign firms more harshly than Chinese firms, they said.
Chinese investors are reportedly concerned about a US investment review process that Washington says is targeted to address acquisitions that raise real national security concerns.
"A bilateral investment treaty would provide additional protections to investors from each country and the other country and goes beyond what was in the World Trade Organisation entry agreement, for example," US-China Business Council President John Frisbie told AFP.
"It can provide additional protection to the Chinese investors in the US and at the same time could also deal with some of the issues facing US companies that invest in China as well," he said.
The US side to the Annapolis talks was led by Treasury Secretary Henry Paulson and the Chinese team by Vice-Premier Wang Qishan.
On Monday, US and Chinese firms signed 35 business deals in Washington. The deals, worth more than US$8.3 billion, were timed for announcement just ahead of the economic talks. AFP, Reuters
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