WASHINGTON (AP) - China agreed Thursday to negotiate a bilateral investment treaty with the United States, a move hailed by Washington as a significant step in the Asian giant's economic reforms that could level the playing field for American businesses.
China made the concession during annual U.S.-China security and economic talks in Washington. Commerce Minister Gao Hucheng told reporters that negotiations on substantive parts of a treaty would start "as soon as possible."
The U.S. has been pushing for such a treaty for years, and American businesses had been looking for progress in this week's talks, saying it would facilitate more protections and market access for American investors in China, where state-owned company enjoy many competitive advantages.
China's new leader, Xi Jinping, who met President Barack Obama last month in California, has signaled he intends to shift toward an economy driven more by domestic consumption and less by exports - changes that would benefit U.S. companies wanted to sell products and services to China's fast-growing middle class.
"A high-standard U.S.-China Bilateral Investment Treaty is a priority for the United States and would work to level the playing field for American workers and businesses by opening markets for fair competition," Treasury Secretary Jacob Lew said in a statement.
"The commitment made today stands to be a significant breakthrough and marks 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.
Treasury officials view it as significant that China has agreed to negotiate on the basis of openness, rather than adopt its traditional approach of barring foreign investment in most sectors or requiring cumbersome administrative processes. As such, it holds promise for American service providers seeking to compete in China.
No officials from either side specified when the negotiations would begin.
According to Treasury officials, China also committed to improve access to its government procurement market and stronger protection of intellectual property rights and trade secrets, amid growing U.S. concern of cyber-enabled theft.
The U.S. continued to press China to allow its currency appreciate against dollar because its low value contributes to a skewed trade balance, but say the yuan has appreciated by 16 percent in real terms against the dollar in recent years. Yi Gang, vice governor of China's central bank, declined to comment directly on Treasury expectations that the yuan's value would rise further in the coming weeks.
Yi said it has appreciated by 2 percent against a strong dollar this year, showing China has made progress in allowing the market to determine the value of its currency.