Treasury Secretary Jacob J. Lew called the development a significant breakthrough. It represents “the first time China has agreed to negotiate a bilateral investment treaty, to include all sectors and stages of investment, with another country,” he said in a statement.
The treaty talks were announced at the close of a two-day meeting here of high-ranking Chinese and American diplomatic, security and economic officials, part of an annual “strategic and economic dialogue” between the world’s two largest economies.
But concerns over espionage and theft using the Internet have complicated the economic discussions, with diplomats working on those issues this week. Protections against cyberspying would presumably have to be part of any investment treaty, and could be a major sticking point.
The United States has repeatedly warned that the theft of American companies’ intellectual property, often over computer networks, could make businesses hesitant to invest. And the United States has blocked some Chinese investments, fearing that they could facilitate electronic espionage.
“The reality is clear: The technological ties that bind us together also introduce a new challenge to our bilateral relationship,” said William J. Burns, the deputy secretary of state. Mr. Burns has stepped in for Secretary of State John Kerry — whose wife has been ill — at the negotiations this week.
The Chinese have responded to the American complaints with barbed comments of their own. In particular, they have pointed to the revelations of Edward J. Snowden, the former contractor for the National Security Agency who last month leaked details on the United States’ sweeping surveillance of foreigners and Americans.
American officials are angry that the Chinese government allowed Mr. Snowden to leave Hong Kong for Russia, where he has been holed up at Sheremetyevo Airport in Moscow in an attempt to avoid deportation to the United States.
While American officials used carefully hedged words like “constructive” to describe the two days of talks, in private they made little effort to hide their disappointment at the outcomes, saying the discussions were as frustrating as President Obama’s inconclusive meeting with president Xi Jinping last month in California. Even on North Korea, the area where the two countries have begun to speak about similar strategic goals, there was no agreement on how to press for a halt to its nuclear and missile testing, much less how to achieve the longtime aim of de-nuclearlization. American officials have slowly come to understand the degree to which Mr. Snowden’s revelations have changed the balance of power in negotiations with the Chinese.
It was a measure of how little was agreed upon that at a dinner on Thursday night, at the end of meetings, the Chinese and Americans spent much of their time praising their cooperation on a single project: Building a Chinese garden at the national arboretum.
Still, the concerns did not seem to hamper progress on economic matters. American businesses face significant hurdles in investing in China — when they are allowed to invest at all. A bilateral treaty might open the door for American financial, consulting and energy companies to make significant inroads in the Chinese market, which is still growing as the number of consumers expands, if not as quickly as in the past.
Business groups applauded the news about the treaty negotiations. Rob Nichols, president of the Financial Services Forum, a lobbying group in Washington, called it a “significant and welcome step forward for the economic relationship between the United States and China.”
“If the two countries are able to reach an agreement for the United States to gain market access to China’s economy — especially in the financial services sector — it would be a win-win for both countries, businesses and workers.”
The two nations would be able to exempt certain industries, like defense, from a bilateral treaty.
Vice Premier Wang Yang of China said through an interpreter that the United States had “pledged to treat Chinese investment equally and fairly” and would welcome investment from Chinese sovereign wealth funds.
Chinese and American officials also announced a series of bilateral initiatives devised to cut emissions that are a cause of climate change. The moves represent something of a softening of views by the United States and China, the world’s two largest producers of such emissions. The two countries have often been antagonists at international climate change meetings.
But Washington and Beijing agreed this week to work together to reduce emissions of soot and carbon dioxide from heavy vehicles, cut energy use in buildings and factories, publish accurate and timely information on emissions, and promote more efficient energy transmission systems. Officials also said they would work together to find ways to trap, store and reuse carbon emissions from power plants that use fossil fuels.
The agreements are not legally binding and do not set emissions targets, but they do signal a cooperative attitude that could improve the mood at United Nations climate conferences, which have yielded little progress in recent years.
Todd D. Stern, who leads the American climate negotiating team, said that the pacts would not immediately transform the international negotiations, but that cooperation would “project something positive.”
“We have had a pretty constructive relationship with the Chinese over the past few years,” Mr. Stern said in a call with reporters on Wednesday. “But there is always a case for deepening it and developing it more and more in the direction of partnership, and that’s what we certainly hope to be doing.”
John M. Broder and David E. Sanger contributed reporting.
Article source: http://www.nytimes.com/2013/07/12/world/asia/us-and-china-to-discuss-investment-treaty-but-cybersecurity-is-a-concern.html?partner=rss&emc=rss
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