U.S. Trade Representative Michael Froman said Tuesday that he hopes Chinese President Xi Jinping's state visit to the United States this week could help push forward negotiations on a bilateral investment treaty (BIT).
"President Xi's visit is an important opportunity to send very positive signals about China's commitment (to economic reforms), including its position on the BIT negotiations," Froman said at an event at the Center for Strategic and International Studies, a Washington D.C.-based think tank.
"We're encouraging China to continue to work on its offers, its negative list, as an important indication of how serious they're about economic reforms," Froman said, referring to China's revised negative list that outlines sectors closed to foreign investment.
The two countries exchanged the revised negative list offers in the latest round of talks on the investment treaty earlier this month, according to the Office of U.S. Trade Representative. China's revised negative list "is better than its original" and "represents serious effort by senior Chinese leaders", but the two sides still need to cover "a substantial distance from the kind of high standard agreement necessary to achieve our mutual objectives", the top U.S. trade official said.
In order to conclude the BIT, the two sides will need to reach agreement on a negative list "that is limited, narrow, and represents a substantial liberalization of the Chinese economy", Froman said.
"We look to President Xi's visit and our other upcoming engagements with China to send a clear signal about its commitment to reform through the BIT negotiations," he added. U.S. President Barack Obama is to host Xi at the White House on Friday.
The two leaders are expected to discuss an array of topics ranging from building a new type of major-country relationship to climate change and hot issues around the world. It would be "a very healthy thing" if the two leaders could show some real progress towards reaching the investment treaty, said Fred Bergsten, a senior fellow and director emeritus at the Peterson Institute for International Economics.
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 China-U.S. Strategic and Economic Dialogue (S&ED) in 2013 that the talks entered a substantial phase, when the two countries agreed to conduct negotiations on the basis of pre-establishment national treatment with a negative list approach.
The investment treaty is expected to continue expanding two-way trade and investment and cementing the foundation of China-U.S. economic ties.