Page 102 - 2017 White Paper
P. 102
7 White Paper on the Business Environment in China
As of this writing, that’s really where we are with the Lobbying on the deal approached a crescendo during
BIT. Chinese President Xi Jinping’s stateside visit. He attended
events that included high-powered CEOs from various
AWin-Win for U.S. and China sectors of the economy, attempting to assuage distrust
and promising progress on the coveted BIT deal.
The U.S. and China have made progress in bilateral
investment treaty-related talks connected with President A total of 94 CEOs signed a letter to Xi and President
Xi Jinping’s visit to Washington. Senior U.S. officials said Obama, urging them to complete the BIT.
they were able to get China to shrink the list of sectors
it is seeking to exclude from the BIT. Mr. Obama and Mr. China has been showing signs of willingness to ease
Xi reaffirmed their commitment to the investment treaty some market restrictions, according to The Hill. For
as a “top economic priority”, the White House said in a instance, in June Beijing permitted foreign investors to
statement (Mauldin and Magnier 2015). own 100 percent of e-commerce companies in China for
the first time. In the coming months, officials removed
The Wall Street Journal reports that China’s latest mandates that foreigners buying real estate pay their
formal offer in the marathon BIT negotiations—involving capital in full before borrowing money in China. Officials
21 rounds dating back to 2008—still contained more than have also removed similar barriers in manufacturing.
35 industry sectors it wants kept off limits to foreigners, China’s Ministry of Commerce released a draft law that
said Myron Brilliant, international vice president of the U.S. experts view as a positive overhaul of its current laws on
Chamber of Commerce, which he added is considered an foreign investment (Bennett and Wilson 2015).
unacceptable number for U.S. companies (Mauldin and
Magnier 2015). There are still serious obstacles ahead. Most
importantly, both sides have yet to agree on sectors in
While the BIT has been quietly inching forward for which investments will not be allowed. Even though
nearly a decade, since 2008, on the US side, its progress Chinese and U.S. negotiators have recently exchanged
has perceived to have accelerated in recent months. If the so-called “negative lists” naming these off-limits
completed and approved by Congress, the deal would roll industries, the two sides are far apart. During China’s State
back technical barriers and investment restrictions that Visit to the US, both Presidents Obama and Xi reiterated
are limiting access to lucrative markets in both countries, that a “high-quality” BIT will be the most important item
similar to an investment chapter of a free-trade deal. on the bilateral economic agenda (Pei 2015).
Given China’s stature as the world’s second-largest The Hill points out the U.S.-China BIT has the potential
economy, the deal would have a massive impact on U.S. to be a win-win agreement to provide broad legal
businesses, but it has largely been overshadowed by the protections, market-opening and dispute settlement
massive Trans-Pacific Partnership (TPP). Still, companies, mechanisms for foreign direct investment (FDI) flows
industry groups and unions have been clamoring to in both directions. China already has over 100 BITs with
make their mark on the deal. other nations, so current and potential U.S. investors are
presently at a disadvantage in competing for investment
Fortune 500 companies and corporate associations opportunities in China. The Hills adds: “This is not a one-
including the U.S. Chamber of Commerce, the National way street; Chinese investors are already investing, and
Association of Manufacturers and the Financial Services looking to invest more, in the U.S., which we should
Forum, which represents the chief executives of the 18 welcome to help increase investment, jobs and economic
largest financial institutions operating in the United growth here at home” (Bennett and Wilson 2015).
States, have reported lobbying on the BIT in disclosure
forms. In meetings with negotiators, the corporate world Manisha Singh, an international lawyer and former
has been communicating three main concerns: being Deputy Assistant Secretary at the US Department of
able to have market access in a country that often favors State, makes a compelling argument in Forbes: “China is a
its state-run enterprises, the ability to compete fairly part of the American economic equation and U.S. policy
with others in the country, and ensuring that China has a makers must find ways to acknowledge this fact. The BIT
transparent regulatory process. will not compensate for violations of international trade
laws or immediately remedy the portion of the trade
102
As of this writing, that’s really where we are with the Lobbying on the deal approached a crescendo during
BIT. Chinese President Xi Jinping’s stateside visit. He attended
events that included high-powered CEOs from various
AWin-Win for U.S. and China sectors of the economy, attempting to assuage distrust
and promising progress on the coveted BIT deal.
The U.S. and China have made progress in bilateral
investment treaty-related talks connected with President A total of 94 CEOs signed a letter to Xi and President
Xi Jinping’s visit to Washington. Senior U.S. officials said Obama, urging them to complete the BIT.
they were able to get China to shrink the list of sectors
it is seeking to exclude from the BIT. Mr. Obama and Mr. China has been showing signs of willingness to ease
Xi reaffirmed their commitment to the investment treaty some market restrictions, according to The Hill. For
as a “top economic priority”, the White House said in a instance, in June Beijing permitted foreign investors to
statement (Mauldin and Magnier 2015). own 100 percent of e-commerce companies in China for
the first time. In the coming months, officials removed
The Wall Street Journal reports that China’s latest mandates that foreigners buying real estate pay their
formal offer in the marathon BIT negotiations—involving capital in full before borrowing money in China. Officials
21 rounds dating back to 2008—still contained more than have also removed similar barriers in manufacturing.
35 industry sectors it wants kept off limits to foreigners, China’s Ministry of Commerce released a draft law that
said Myron Brilliant, international vice president of the U.S. experts view as a positive overhaul of its current laws on
Chamber of Commerce, which he added is considered an foreign investment (Bennett and Wilson 2015).
unacceptable number for U.S. companies (Mauldin and
Magnier 2015). There are still serious obstacles ahead. Most
importantly, both sides have yet to agree on sectors in
While the BIT has been quietly inching forward for which investments will not be allowed. Even though
nearly a decade, since 2008, on the US side, its progress Chinese and U.S. negotiators have recently exchanged
has perceived to have accelerated in recent months. If the so-called “negative lists” naming these off-limits
completed and approved by Congress, the deal would roll industries, the two sides are far apart. During China’s State
back technical barriers and investment restrictions that Visit to the US, both Presidents Obama and Xi reiterated
are limiting access to lucrative markets in both countries, that a “high-quality” BIT will be the most important item
similar to an investment chapter of a free-trade deal. on the bilateral economic agenda (Pei 2015).
Given China’s stature as the world’s second-largest The Hill points out the U.S.-China BIT has the potential
economy, the deal would have a massive impact on U.S. to be a win-win agreement to provide broad legal
businesses, but it has largely been overshadowed by the protections, market-opening and dispute settlement
massive Trans-Pacific Partnership (TPP). Still, companies, mechanisms for foreign direct investment (FDI) flows
industry groups and unions have been clamoring to in both directions. China already has over 100 BITs with
make their mark on the deal. other nations, so current and potential U.S. investors are
presently at a disadvantage in competing for investment
Fortune 500 companies and corporate associations opportunities in China. The Hills adds: “This is not a one-
including the U.S. Chamber of Commerce, the National way street; Chinese investors are already investing, and
Association of Manufacturers and the Financial Services looking to invest more, in the U.S., which we should
Forum, which represents the chief executives of the 18 welcome to help increase investment, jobs and economic
largest financial institutions operating in the United growth here at home” (Bennett and Wilson 2015).
States, have reported lobbying on the BIT in disclosure
forms. In meetings with negotiators, the corporate world Manisha Singh, an international lawyer and former
has been communicating three main concerns: being Deputy Assistant Secretary at the US Department of
able to have market access in a country that often favors State, makes a compelling argument in Forbes: “China is a
its state-run enterprises, the ability to compete fairly part of the American economic equation and U.S. policy
with others in the country, and ensuring that China has a makers must find ways to acknowledge this fact. The BIT
transparent regulatory process. will not compensate for violations of international trade
laws or immediately remedy the portion of the trade
102
