Page 108 - 2017 White Paper
P. 108
7 White Paper on the Business Environment in China
Similar sentiments were echoed a few months later American Chamber of Commerce in China formulated a
in November 2014, when during President Obama’s visit new initiative – the BIT Task Force – to act as a committee
to Beijing for APEC, senior leaders from both countries specializing in advocating American business interests in
had expressed a desire to conclude treaty talks in 2015. US-China BIT negotiations (Rosen 2014).
US Trade Representative Michael Froman remarked: “Our
focus with China right now is on the Bilateral Investment Key points included the following:
Treaty, which is one key set of issues on investment
that are part of an overall high-standard approach”. US negotiations are spearheaded by the Office of
The chief US trade negotiator said: “a short negative list the US Trade Representative and the Department of the
discussed under the BIT would mean everything is open State, both of which focus on six core areas:
in China except for a few things that are specially listed”.
He described it as a “good test case for a high-standard · National treatment for foreign investors;
agreement with China” (Chen 2014). · Prompt, adequate, and effective expropriation
processes;
The week before APEC, in early November 2014, ·Transferability of assets between both countries;
China and the US concluded talks on the tariff-cutting · Performance requirements;
Information Technology Agreement (ITA), hailed by Mr. ·Investor choice in hiring practices; and
Froman as “a major breakthrough” (Chen 2014). A month · Investor state dispute rights, due process, and
earlier, according to various media reports, Vice-Finance mechanisms.
Minister Zhu Guangyao had stated that the US-led Trans-
Pacific Partnership (TPP) “is incomplete without China’s The US-China BIT is essentially a portion of a US
participation” (Chen 2014; Reuters 2014; China Daily model Free Trade Agreement, as all such US FTAs
2014). Speaking in Washington DC, Mr. Zhu said: “...our include a chapter on investment. The BIT is made of two
position is clear. As China becomes more open, it’s very components; the text, or main body of the treaty, which
important for us to be integrated into the global trade includes agreements and mandates applicable to both
system with high standard” (China Daily 2014). US and China, as well as the appendices, including the
negative lists, which will contain each country’s respective
According to China Daily, Mr. Zhu’s comments are restrictions on foreign investment. Being a treaty, the BIT
“widely regarded as a major turning point in China’s must be approved by Congress, and hence must contain
attitude towards TPP. China has evolved from having sufficient compromises on China’s part in order for the
a deep suspicion of TPP as part of a US containment final BIT to pass the bill (Rosen 2014).
strategy of China to showing an interest in the regional
free trade agreement”(Chen 2014). According to the same At the 2014 Strategic Economic Dialogue, US and
report, Ely Ratner, a senior fellow and deputy director of Chinese negotiators affirmed their commitment to
the Asia-Pacific Security Program at the Center for a New intensifying Bilateral Investment Treaty Negotiations,
American Security, wrote in Politico magazine that “the setting a goal to “reach agreement on core issues and
growing consensus in Beijing that China should try to be major articles of the text by the end of 2014” and “initiate
part of the TPP reflects not only the potential economic the ‘negative list’ negotiation in early 2015 based on each
benefits it could accrue by joining the grouping, but also other’s ‘negative list’ offers (Rosen 2014).
the fact that the changes necessary for China to qualify
for membership could advance President Xi Jinping’s The broad slate of domestic reforms in the Decisions
efforts to make domestic economic reforms in areas such indicates that China knows these reforms are in its own
as market access, government procurement, intellectual national interest and must be achieved, declares Mr.
property rights, labor standards and environmental Rosen in his Asia Policy report. It makes sense from China’s
protection” (Ibid.). perspective to negotiate concessions from abroad for
reforms that must be taken in any case. However, it is
American business interests in China are keenly important to recognize that China is pursuing market-
watching the proceedings. In September 2014, the oriented economic reforms for the simple, self-interested
reason that it is simply a wise thing to do (Rosen 2014).
108
Similar sentiments were echoed a few months later American Chamber of Commerce in China formulated a
in November 2014, when during President Obama’s visit new initiative – the BIT Task Force – to act as a committee
to Beijing for APEC, senior leaders from both countries specializing in advocating American business interests in
had expressed a desire to conclude treaty talks in 2015. US-China BIT negotiations (Rosen 2014).
US Trade Representative Michael Froman remarked: “Our
focus with China right now is on the Bilateral Investment Key points included the following:
Treaty, which is one key set of issues on investment
that are part of an overall high-standard approach”. US negotiations are spearheaded by the Office of
The chief US trade negotiator said: “a short negative list the US Trade Representative and the Department of the
discussed under the BIT would mean everything is open State, both of which focus on six core areas:
in China except for a few things that are specially listed”.
He described it as a “good test case for a high-standard · National treatment for foreign investors;
agreement with China” (Chen 2014). · Prompt, adequate, and effective expropriation
processes;
The week before APEC, in early November 2014, ·Transferability of assets between both countries;
China and the US concluded talks on the tariff-cutting · Performance requirements;
Information Technology Agreement (ITA), hailed by Mr. ·Investor choice in hiring practices; and
Froman as “a major breakthrough” (Chen 2014). A month · Investor state dispute rights, due process, and
earlier, according to various media reports, Vice-Finance mechanisms.
Minister Zhu Guangyao had stated that the US-led Trans-
Pacific Partnership (TPP) “is incomplete without China’s The US-China BIT is essentially a portion of a US
participation” (Chen 2014; Reuters 2014; China Daily model Free Trade Agreement, as all such US FTAs
2014). Speaking in Washington DC, Mr. Zhu said: “...our include a chapter on investment. The BIT is made of two
position is clear. As China becomes more open, it’s very components; the text, or main body of the treaty, which
important for us to be integrated into the global trade includes agreements and mandates applicable to both
system with high standard” (China Daily 2014). US and China, as well as the appendices, including the
negative lists, which will contain each country’s respective
According to China Daily, Mr. Zhu’s comments are restrictions on foreign investment. Being a treaty, the BIT
“widely regarded as a major turning point in China’s must be approved by Congress, and hence must contain
attitude towards TPP. China has evolved from having sufficient compromises on China’s part in order for the
a deep suspicion of TPP as part of a US containment final BIT to pass the bill (Rosen 2014).
strategy of China to showing an interest in the regional
free trade agreement”(Chen 2014). According to the same At the 2014 Strategic Economic Dialogue, US and
report, Ely Ratner, a senior fellow and deputy director of Chinese negotiators affirmed their commitment to
the Asia-Pacific Security Program at the Center for a New intensifying Bilateral Investment Treaty Negotiations,
American Security, wrote in Politico magazine that “the setting a goal to “reach agreement on core issues and
growing consensus in Beijing that China should try to be major articles of the text by the end of 2014” and “initiate
part of the TPP reflects not only the potential economic the ‘negative list’ negotiation in early 2015 based on each
benefits it could accrue by joining the grouping, but also other’s ‘negative list’ offers (Rosen 2014).
the fact that the changes necessary for China to qualify
for membership could advance President Xi Jinping’s The broad slate of domestic reforms in the Decisions
efforts to make domestic economic reforms in areas such indicates that China knows these reforms are in its own
as market access, government procurement, intellectual national interest and must be achieved, declares Mr.
property rights, labor standards and environmental Rosen in his Asia Policy report. It makes sense from China’s
protection” (Ibid.). perspective to negotiate concessions from abroad for
reforms that must be taken in any case. However, it is
American business interests in China are keenly important to recognize that China is pursuing market-
watching the proceedings. In September 2014, the oriented economic reforms for the simple, self-interested
reason that it is simply a wise thing to do (Rosen 2014).
108
