This could be a Sino-American century
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.