"For the technocrats from the two biggest economies to have a common understanding of and approach to global economic problems is the most important outcome of the exercise," Dollar wrote on the Brookings website last week.
INVESTMENT TREATY TALKS
Talks on a bilateral investment treaty (BIT) certainly will be high on the agenda during the upcoming two-day S&ED meetings as BIT negotiations have been considered the most important issue in the two nation's economic relationship.
The investment treaty talks began in 2008 as China and the U.S. 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.
"Such an agreement could be a game changer in terms of unlocking new opportunities and leveling the playing field for U.S. firms and investors," Nathan Sheets, undersecretary for international affairs at the U.S. Treasury, said in April. "The S& ED will continue to support the BIT negotiations and investment liberalization."
The two countries agreed at last year's S&ED meetings to resolve core issues and major provisions of the BIT by the end of 2014 and to initiate negotiations on the negative list, sectors and items barred to each other's investment, in early 2015.
During the latest round of talks in Beijing earlier this month, the two sides exchanged initial negative list offers, ushering in a new phase of bilateral negotiations.
While China's initial negative list offer "may be longer than the U.S. wants," the fact there's a negative list is already "a huge progress," said Posen, who expected the two countries to move forward the investment treaty talks at the S&ED meetings.
"The important question is would there be any what we call ' early harvest'," said Dollar, referring to China's willingness to open some sectors for foreign investment soon before a treaty is agreed upon.
If China opens up some sectors soon and improves market access for U.S. and other foreign investment, that will "create a much stronger foundation in the United States for moving ahead with the bilateral investment treaty," he added.
Experts are optimistic that the U.S. and China could finish the BIT talks under the Obama administration, but the ratification might have to wait until after the 2016 U.S. presidential election.
Huang 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 U.S. and China, and investors from both countries will get better access to each other's markets.
The 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 U.S. and China in the foreseeable future," Huang noted.
CLEAN ENERGY COLLABORATION
Huang believed climate change and clean energy are also on the agenda of the upcoming S&ED meetings as both countries could gain a lot by collaboration in these areas, but they haven't done enough to tap that great potential.
The whole world needs green technology products to help address global environmental issues, but these products currently are too expensive, Huang said.