WASHINGTON (Reuters) - Obama administration officials will press their Chinese counterparts to take steps to improve China’s business and investment climate during bilateral meetings in early June, a senior U.S. Treasury official said on Tuesday.
Nathan Sheets, undersecretary for international affairs, said progress on opening Chinese growth sectors to U.S. investment and improved transparency of government regulations will be among the most important issues in the Strategic and Economic Dialogue talks.
“I think the key is to stay focused intensively on this issue of business climate,” Sheets told a forum hosted by the Brookings Institution.
“We need to see discreet progress on issues like transparency, reliable rule of law. The national security review that they have stands in the way of investment, so increased openness to investment... This plays an increasingly key role in our discussions with our Chinese counterparts,” he added.
The focus on business climate and the inability of U.S. firms to invest in certain services sectors, including tourism, healthcare and logistics, comes as the Obama administration is working to negotiate a bilateral investment treaty with China. U.S. negotiators have said they are still awaiting a new “negative list” of sectors that Beijing wants to keep off limits.
Sheets reaffirmed the administration’s commitment to reaching an investment treaty deal before Obama’s presidency ends, adding: “We are enthusiastic about investing whatever resources on our side are necessary in order to see the bilateral investment treaty come to fruition.”
Other important topics for the economic side of the eighth installment of the Strategic and Economic Dialogue talks include further steps by China to rebalance its economy away from exports and investment toward more domestic consumption and services, as well as reducing China’s excess industrial capacity, which is causing trade tensions around the world.
Sheets said a good use of China’s fiscal stimulus capacity would be to help workers recover from the loss of factory and coal mine jobs as steel capacity is reduced.
On currency, Sheets said China’s yuan will need to demonstrate some “upside flexibility” when economic conditions improve for China to make progress toward achieving a market-determined exchange rate.
Reporting by David Lawder, editing by G Crosse and Dan Grebler