WASHINGTON – Think tank experts expect the Strategic and Economic Dialogue between the United States and China next week to focus on issues surrounding the proposed Bilateral Investment Treaty, opening up both countries markets for more foreign investment.
Jeff Schott, senior fellow at the Peterson Institute for International Economics, said Wednesday he doesn’t expect big headlines from this year’s meeting in Beijing.
“I think there is scope for significant progress to deal with important issues, particularly the Bilateral Investment Treaty, and also, perhaps, to push further engagement by China,” Schott said during a conference call.
He added there will likely be a focus in trade negotiations on services and information technology products.
“I think both of these complement the reforms that China is seeking to do domestically and would help China prepare over time for deeper [involvement] in the Trans-Pacific Partnership or in regional economic integration in the Asian Pacific,” Schott said.
Peterson Senior Fellow Nick Lardy added that China’s economy seems to be picking up in comparison to earlier in 2014.
“In part this is because they’ve undertaken some specific fine tuning of their monetary policy,” said Lardy who holds a Ph.D in economics from the University of Michigan. “They’ve allowed some increase in credit from certain kinds of financial institutions that specialize in certain types of lending.”
Secretary of State John Kerry, and Treasury Secretary Jacob Lew will attend the sixth meeting of the Strategic and Economic Dialogue between the United States and China in Bejing on July 9-10. Their Chinese counterparts, State Councilor Yang Jiechi and Vice Premier Wang Yang are China’s key players.
Experts do not expect the two countries to finish preliminary talks on negotiating the Bilateral Investment Treaty by the end of the `U.S.-China Strategic and Economic Dialogue.
If the treaty is successfully negotiated down the road, there will be fewer barriers to foreign investment in China. This would give U.S. companies more access to Chinese markets.
As part of negotiating the Bilateral Investment Treaty, U.S. officials plan to address issues relating to intellectual property rights and trade secrets. This is a priority for the U.S. as part of a push toward leveling the playing field for American businesses.
In testimony before the Senate Foreign Relations Committee last month, State Department official Daniel Russel maintained that many Chinese trade policies are discriminatory and remove incentives for U.S. companies to introduce innovative ideas on the market.
Russell singled out some of them.
“Subsidies that tilt the competitive playing field in favor of Chinese national champions, policies that pressure companies to hand over intellectual property as a condition for access to the Chinese market, and export credits that unfairly advantage Chinese companies in third markets,,” said Russel, an assistant secretary of state for East Asian and Pacific Affairs..
The State Department website notes that China is one of the U.S.’s fastest growing export markets with exports growing 90 percent between 2007 and 2013.
U.S. officials plan to urge the Chinese to promote a market-determined exchange rate.