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 initial offers of negative lists," Zhang Xiangchen, China's deputy international trade representative and assistant minister of commerce, said at a press briefing on the sidelines of the seventh round of the China-U.S. Strategic and Economic Dialogue (S&ED) starting here Tuesday.
"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," he said, adding that both countries expressed their willingness to "have further progress" on BIT negotiations and make the negative lists "shorter and better."
While the negative list issue is more difficult for China, both sides need to improve their negative list offers, the Chinese official said, urging the U.S. government to improve its investment environment as more and more Chinese investments have come into the country.
Zhang said the two sides will have two further rounds of negotiations before September to improve the negative lists offers, but declined to give specific timetable for the conclusion of the talks.
"I hope the BIT negotiations could be concluded as quickly as possible," Zhang said, "as for the specific progress, it is up to the negotiations that will happen."
Adam Posen, president of Peterson Institute for International Economics, believed the United States and China could finish BIT talks under the Obama administration.
"There is more room for agreement than people realized," Posen said in a recent interview with Xinhua. "I certainly think (it's) doable before President Obama leaves office."
The investment treaty talks began in 2008 as China and the United States sought to increase mutual investment, which only accounted for a tiny share of their respective overseas investment.
But 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-U.S. 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.