High hopes over investment pact

High hopes over investment pact

After a false start, talks between the world's two biggest economies to forge a bilateral treaty aimed at boosting investments in each other's markets are back on track.

Not surprisingly, news on Friday that the United States and China will resume stalled negotiations on a bilateral investment treaty (BIT) has sparked great expectations.

American firms hope it will open up vast business opportunities for them in some 100 of China's sectors from cars to finance, where Beijing currently imposes restrictions on foreign investment.

Chinese investors say they want the treaty to give them fair treatment in the US.

Some have been spooked by Washington's recent moves to block several attempts by Chinese firms such as network equipment provider Huawei from investing in sensitive sectors like telecommunications, citing national security concerns.

Still, Beijing's push to restructure its economy could unleash billions of dollars into strategic sectors in the US.

"American firms have a lot of technical and management expertise to offer in areas like biosciences and high-tech services," said Renmin University professor Zhao Xijun. "Chinese firms need this to upgrade and want to invest."

Some, such as American Enterprise Institute resident scholar Claude Barfield, also see a successful BIT as a potential stepping stone for China to participate in the Trans-Pacific Partnership (TPP).

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