This could be a Sino-Amer­i­can cen­tury

China Daily (Canada) - - SHANGHAI -

Seiz­ing upon China’s re­cent eco­nomic tur­bu­lence like sharks that have smelled blood, hyp­o­crit­i­cal Repub­li­can pres­i­den­tial can­di­dates are cir­cling Pres­i­dent Xi Jin­ping’s state visit to theUS this month, mak­ing a suc­cess­ful ne­go­ti­a­tion withUS Pres­i­dent Barack Obama less likely.

But for China’s re­cent eco­nomic set­backs, these dem­a­gogues would still be trip­ping over each other in a race to the bot­tom on the immigration is­sue led by the buf­foon in a bouf­fant. They call to mind what a dis­gracedUS vice-pres­i­dent (Spiro Agnew) of a dis­graced pres­i­dent (Richard Nixon) once said: a bunch of “nat­ter­ing nabobs of neg­a­tivism”.

For­mer pres­i­den­tial can­di­date and am­bas­sador to China, JonHunts­man, rightly de­scribed our coun­tries be­ing in “the most com­plex and chal­leng­ing re­la­tion­ship of the 21st cen­tury”. We are the best of “fren­e­mies” and will re­main so. How­ever, un­like all the al­ready con­tentious bi­lat­eral is­sues, such as cy­ber­spy­ing, is­land dis­putes and hu­man rights, for which ex­pec­ta­tions for progress are lim­ited, the eco­nomic events of re­cent weeks do present added im­pe­tus to one item on the agenda whose ne­go­ti­a­tion has bogged down, and should and can be re­sus­ci­tated: the Bi­lat­eral In­vest­ment Treaty.

Most BITs are gen­er­ally lim­ited to ad­ju­di­cat­ing rou­tine in­vestor dis­putes. But China has gone on record to ne­go­ti­ate the BIT with “high stan­dards”, in­di­cat­ing that it will in­clude all stages of in­vest­ment and all sec­tors. This is the first time China has agreed to do so with any coun­try.

TheUS would ben­e­fit from in­creased ac­cess to the Chi­nese mar­ket, par­tic­u­larly in the ser­vice sec­tor where it main­tains a com­pet­i­tive ad­van­tage. It would also en­cour­age greater in­vest­ment from the Chi­nese side.

China would ben­e­fit from more con­sis­tent treat­ment of its in­vestors in theUS in ad­di­tion to ac­cess toUS work­place pro­duc­tiv­ity tools and tech­nolo­gies in­side China to im­prove its eco­nomic ef­fi­ciency. The sta­bil­ity of the Chi­nese econ­omy and stock mar­ket would re­sult from lower volatil­ity be­cause of a higher ra­tio of more savvy in­sti­tu­tional in­vestors, as well as from ad­vanced risk man­age­ment tech­niques.

Ac­cord­ing toUS Trea­sury Sec­re­tary Jack Lew, the agree­ment could, for the first time, in­clude all phases of in­vest­ment, in­clud­ing mar­ket ac­cess, and sec­tors of the Chi­nese econ­omy (ex­cept for lim­ited ne­go­ti­ated ex­cep­tions).

Lew­said: “A high stan­dardUS-China BIT is a pri­or­ity for theUnited States and is crit­i­cal to lev­el­ing the play­ing field for Amer­i­can work­ers and busi­nesses. A suc­cess­ful BIT ne­go­ti­a­tion would open up China’s highly re­stric­tive sys­tem to for­eign in­vest­ment and help cre­ate a wide range of op­por­tu­ni­ties forUS firms to par­tic­i­pate in the Chi­nese mar­ket… in­clud­ing greater mar­ket ac­cess, re­moval of in­vest­ment bar­ri­ers, pro­tec­tions against tech­nol­ogy trans­fer, and in­creased trans­parency.”

China’s Com­merceMin­is­ter GaoHucheng has rightly said:“… in­vest­ment is an im­por­tant area of China-US eco­nomic co­op­er­a­tion. It is a mu­tual con­cern of both par­ties, and both par­ties need to have cre­ative think­ing in or­der to cre­ate con­ve­nient con­di­tions for the mu­tu­ally ben­e­fi­cial co­op­er­a­tion be­tween busi­nesses of the two coun­tries.”

Un­for­tu­nately, theUS is balk­ing be­cause the so-called neg­a­tive list of Chi­nese ex­clu­sions is far from lim­ited. The talks ap­pear to have screeched to a halt. Per­haps the Xi-Obama sum­mit can re­vive them.

Re­gret­tably, there are two caveats. In the heat (read: hot air) of the pres­i­den­tial pri­mary sea­son, rat­i­fi­ca­tion by theUS Se­nate by the re­quired two-thirds ma­jor­ity is im­pos­si­ble. It may not be so later depend­ing on the make-up of the WhiteHouse and Se­nate in 2017. And there are news re­ports that theUS is poised to take dra­co­nian mea­sures to stop Chi­nese cy­ber­spy­ing, in­clud­ing eco­nomic sanc­tions. If this oc­curs, the BIT may well go into the deep freeze, if not the scrapheap of history.

Few de­bate that the 19th cen­tury was the Bri­tish cen­tury and that the 20th cen­tury was the Amer­i­can cen­tury. A spir­ited al­beit not al­ways ob­jec­tive de­bate sur­rounds whether our 21st cen­tury will be Chi­nese or Amer­i­can. While, as lead­ing pow­ers we will al­ways have dis­agree­ments and re­main “fren­e­mies”, there is enough of an op­ti­mist in me to imag­ine that this could be the Si­noAmer­i­can cen­tury, a unique bi-na­tional co­op­er­a­tion of part­ners that some­times agree to dis­agree.

The au­thor is a se­nior ad­viser to Ts­inghua Univer­sity and for­mer di­rec­tor and vi­cepres­i­dent of ABC Tele­vi­sion in New York.

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