During President Xi Jinping’s recent Washington visit, China missed its self-imposed deadline to provide a revised offer for the US-China bilateral investment treaty (BIT) negotiations and has not set a new target date to do so. The next inflection point on the calendar is the US-China Strategic and Economic Dialogue, which will likely take place in June.
Bilateral investment treaty
China is determined to arrive at a high-standard Bilateral Investment Treaty (BIT) that will benefit US industry as soon as possible, said Li Chenggang, director-general of China’s Ministry of Commerce’s (MOFCOM) Treaty and Law Department and China’s lead BIT negotiator, at a USCBC luncheon program February 25 in Washington, D.C.
Though China’s slowing growth impacts US company operations, economic restructuring is offering new opportunities to American companies, said a group of US-China Business Council (USCBC) executives during a February 28 roundtable discussion with Treasury Secretary Jacob Lew in Beijing. Lew was in China for the G20 finance ministers’ meeting in Shanghai on February 26 and 27.
The US-China Bilateral Investment Treaty (BIT) negotiations, which aim to establish the rules of the road for cross-border investing, have the ambition to reach an agreement of unprecedented scope, although the prospects and timetable for completion remain uncertain.
In November, Chinese and US negotiators surprised the global business community by announcing an end to a standoff over high-technology tariffs. In agreeing to move forward with the World Trade Organization’s (WTO) Information Technology Agreement (ITA), China paved the way for the slashing of tariffs on items from semiconductors to video game consoles. The breakthrough on ITA was a welcome development, but there are a number of other WTO initiatives that both the United States and China are actively negotiating that could significantly impact American companies across sectors.
Your customers have probably heard that US companies do business in China so they can cut costs and outsource American jobs. It is a phrase that’s been uttered many times—so much so that many Americans think it’s true. But the simple fact is that it’s not.
Why are US companies in China in the first place?