[BEIJING] The United States and China have begun formal talks on demands for market access for an investment treaty, China's Ministry of Commerce said on Friday, calling it a new phase in negotiations that could set the scope of an eventual deal.
The initial swapping of "negative lists", which outline sectors that the world's two largest economies deem closed to the other side's investors, begins what is likely to be the most contentious stage of the Bilateral Investment Treaty (BIT) talks launched in 2008.
China has more restrictions on foreign investment than the United States, and US investors hope that a treaty will give them increased access to China's many state-dominated industries, from financial services to telecommunications.
Chinese and US negotiators met in Beijing for a week of talks beginning on Monday, the ministry said in a statement on its website.
"During this round of talks, the two sides for the first time exchanged negative list offerings, and formally began negative list negotiations, symbolizing that talks have entered a new phase," the ministry said.
"The two sides will treat the China-US investment agreement as the most important matter in the bilateral trade relationship, and will put all necessary resources into negotiations in order to reach a mutually beneficial and high-level investment agreement," the ministry said.
The announcement confirms an earlier Reuters report, which said the initial lists, already months overdue, would be exchanged as early as Monday, as Chinese and US officials prepare for high-level talks in Washington in late June.
The statement did not include details on the contents of the negative lists.
However, foreign business leaders have said that emerging Chinese regulations intended to bolster national security have called into question China's commitments to market reforms and could further restrict foreign access to sensitive sectors.
Nonetheless, some experts say there are factions in China that would like to use the external pressure of the BIT to hasten domestic reforms.
China has complained that the United States has singled out Chinese investors for national security reviews.
Zhong Shan, China's International Trade Representative, told reporters at a briefing on Friday that China had made great efforts to trim its list.
"The length or shortness of the list cannot fully illustrate whether negotiations are sincere on not. We must objectively look at the two countries' actual needs and actual situations to fix the length of the negative lists," Mr Zhong said.