Goldman pushes for investment treaty with China

Washington

GOLDMAN Sachs Group is exhorting the US to quickly complete a treaty with China to open the long-sheltered market of the world's most populous nation to American banks and other firms.

Goldman Sachs' urgency contrasts with another important part of corporate America. Silicon Valley is wary of any deal that would not address broader issues, including the potential unauthorised use of technology by Chinese partners who then become competitors.

While Wall Street is eager to manage more Chinese money and underwrite more Chinese securities, other companies want negotiations that would also include promises that state-owned firms play by market rules without protection from the government.

Goldman Sachs is ready to move ahead without resolving such concerns. "The opportunity is now," Mark Schwartz, the chairman of Goldman Sachs' Asia-Pacific business, said in an interview. "After 35 years in the business, one of the things I've learnt is that there is a time and moment to do a deal. And that moment is now."

Mr Schwartz said that he is "not certain" that state-owned firms are "something we have to be worried about" in a treaty. "Just being a state-owned enterprise itself doesn't confer advantages," he added.

Although Goldman Sachs is leading the charge in the financial industry, it is not alone. In a letter to US President Barack Obama last October, 51 chief executives called for action on an investment treaty. They included the leaders of Archer-Daniels-Midland, Ford Motor, Wal-Mart Stores Inc and Westinghouse Electric.

"It was a message meant to resonate in Beijing," John Frisbie, president of the US-China Business Council, said in an interview. "It tells the Chinese we are willing to fight to get this approved."

This week, Goldman Sachs will host a conference of American and Chinese chief executives at its New York headquarters - one that will include top US government officials - to drive home the need for action. The gathering is a follow-up to a similar one in Beijing in July. BLOOMBERG