The United States and China wrapped up two days of talks on Wednesday under a so-called “strategic economic dialogue” set up two years ago to ease tensions over trade and economic issues.
They reported the following results.
INVESTMENT TREATY NEGOTIATIONS:
— The two countries will begin to negotiate a bilateral investment treaty that promises to open and provide for transparent investment flows into each country.
— The United States said it will press for free capital transfers and full legal protections for investors.
— Several rounds of negotiations will take place before the next SED meeting, but timeline depends on “quality” of the agreement.
ENERGY, ENVIRONMENT COOPERATION:
— The countries signed a 10-year “framework” agreement that builds on a pact announced in December by identifying five goals — clean and efficient electric power, clean water, clean air, clean and efficient transportation, and conservation of forests and wetlands.
— The framework agreement includes cooperation on alternative fuels, including next-generation cellulosic biofuels and alternative power generation sources, as well as clean coal technology.
— The countries said discussions on eliminating trade barriers for environmental goods and services are now focused on specific products and methods of tariff reduction.
TRANSPORTATION FORUM:
— The countries agreed to create a forum to discuss infrastructure needs across all modes of transportation and work to enable a free flow trade related to the transport sector.
— The United States said this will help create opportunities for American companies to help design, construct and equip China’s new roads, railways, ports and airports.
MACROECONOMIC COOPERATION:
— The United States agreed to assess the progress of American financial services firms and regulators to implement new procedures and to strengthen operations. Based on this assessment, Washington will consider whether further steps are needed.
— China will complete by year-end an assessment of foreign participation in its securities, futures and fund management firms and make policy recommendations on adjusting foreign equity participation in its securities market.
— Chinese Vice Premier Wang Qishan said the two sides agreed to coordinate monetary and fiscal policies to deepen economic cooperation between the two countries. He did not elaborate on how that coordination would be implemented.
FINANCIAL SERVICES SECTOR REFORM:
— China agreed to launch a pilot project to allow foreign financial service firms to provide consumer loans in China.
— The United States agreed to expeditiously process applications by Chinese banks to establish U.S. branches.
— China will allow qualified foreign companies to list on its stock exchanges by issuing shares or depository receipts and it will ease qualifications for foreign incorporated banks to issue subordinated RMB-denominated bonds.
— China agreed to open up new market opportunities for U.S. mutual fund and money managers by reducing the initial “lockup period” for the investments of certain Qualified Foreign Institutional Investors.– Beijing also agreed to expand business opportunities for foreign credit rating agencies by allowing existing joint ventures to apply for a license to rate corporate bonds without reducing their existing foreign equity stake, once certain new U.S. reporting regulations go into force.
— In the insurance sector, China recognized U.S. companies’ concerns about proposed restrictions on investments in Chinese insurers and said it would continue to fully consult and consider comments received from all interested parties.
INTELLECTUAL PROPERTY, PRODUCT SAFETY
— The United States and China agreed to intensify cooperation on protecting intellectual property rights.
— Wang Qishan said China would step up efforts to protect food and increase product safety and inspections.
— China agreed to allow the U.S. Food and Drug Administration to establish inspections offices in China.
— The United States and China signed a five-year “work plan” on food and feed safety and pledged to sign a similar agreement for drugs and medical devices by the end of 2008.
— The United States and China signed a memorandum of understanding to cooperate on traditional Chinese herbal medicines.
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