Econ­omy ex­pected to top sum­mit

China Daily (Canada) - - ACROSS AMERICAS - By HU YONGQI in Washington huy­ongqi@chi­nadaily.com.cn

Think tanks and an­a­lysts in Washington ex­pect eco­nomic is­sues to be on top of the agenda for the up­com­ing sum­mit be­tween Chi­nese Pres­i­dent Xi Jin­ping and US Pres­i­dent Barack Obama later this month.

Dur­ing a seminar at the Cen­ter for Strate­gic & In­ter­na­tional Stud­ies (CSIS) on Tues­day, eco­nomic ex­perts said the two lead­ers are ex­pected to ex­change their ideas on key sub­jects such as Chi­nese eco­nomic poli­cies, the Bi­lat­eral In­vest­ment Treaty (BIT), cur­rency ex­change rate, high-tech in­dus­tries and tech­ni­cal in­no­va­tions.

The Rhodium Group re­leased a re­port on the Chi­nese econ­omy at the seminar. Daniel Rosen, part­ner at Rhodium, said Xi needs to give Obama a clear un­der­stand­ing of what eco­nomic pres­sure there is on China and the con­se­quences.

“We need to know the over­all out­look for Chi­nese eco­nomic growth, as the US doesn’t have a good un­der­stand­ing of this yet. This (sum­mit) is a good op­por­tu­nity for both pres­i­dents,” Rosen said.

Rosen said China’s eco­nomic per­for­mance af­fects the United States, and the US has a vi­tal need to un­der­stand what Xi is do­ing and what should be ex­pected in the fu­ture. He said that for­eign di­rect in­vest­ment is one of the ar­eas for new growth. US in­vestors have put bil­lions of dol­lars into the Chi­nese mar­ket, and a new trend seems to be start­ing. Chi­nese FDI has grown from al­most noth­ing to more than $10 bil­lion a year just in the past few years, the an­a­lyst said.

Rosen said another im­por­tant is­sue con­cerns the most promis­ing in­dus­tries for the United States and for China — in­for­ma­tion and com­mu­ni­ca­tions in­dus­tries and tech­nolo­gies that have changed peo­ple’s lives.

How­ever, that in­dus­try has been trou­bled with re­ported na­tional se­cu­rity con­cerns. “High-tech in­dus­tries need clar­ity from the lead­ers of what changes are go­ing to look like in the reg­u­la­tory en­vi­ron­ment in the years ahead,” Rosen said. “If it’s a very re­stric­tive reg­u­la­tory en­vi­ron­ment, then it’s not go­ing to con­trib­ute to global eco­nomic growth. Some na­tional se­cu­rity con­cern is just a pro­tec­tion­ist way to keep com­pe­ti­tion out,” Rosen said.

Dur­ing the past decade, China has been re­quir­ing the US to lift re­stric­tions on high­tech equip­ment ex­ported to China. The area may be one of the top­ics for both pres­i­dents, but Ni­cholas Lardy, a se­nior fel­low at the Peter­son In­sti­tute for In­ter­na­tional Eco­nom­ics, doubted any sub­stan­tial progress would be made on it at the sum­mit.

Ex­change rates also may draw at­ten­tion. Rosen said China has made re­forms in cur­rency man­age­ment, but there is a long way to go.

“What China has been do­ing in reg­u­lat­ing the ex­change rate was sup­ported by the US, and I don’t see any pos­si­bil­ity to re­fer to it in this sum­mit,” Lardy said.

China and the US have had rounds of ne­go­ti­a­tions to forge a BIT, re­garded by many econ­o­mists to be a new driv­ing force for Chi­nese eco­nomic growth.

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