June 6, 2016 / 1:22 AM / in a year

China to submit 'negative list' for U.S. investment treaty talks next week

Chinese Vice Premier Wang Yang (R) meets with US trade representative Michael Froman (L) during the China's state leaders meeting with US trade representatives at the eight round of U.S-China strategic and economic dialogues & the seventh round of U.S-China high-level consultation on people-to-people exchange in Beijing on June 6, 2016. REUTERS/Nicolas Asfouri/Pool

BEIJING (Reuters) - China will submit next week its “negative list” offer of sectors that would remain off-limits to U.S. investment in a U.S.-China bilateral investment treaty (BIT), Vice Premier Wang Yang said on Monday.

Wang made the comments in opening remarks to the economic track of the Strategic and Economic Dialogue talks in Beijing.

U.S. officials have said a negative list that greatly reduces the number of off-limits sectors is critical to reaching a deal.

U.S. Treasury Secretary Jack Lew also said he looked forward to seeing the new negative list when U.S. and Chinese BIT negotiators meet next week in Washington.

“The United States stands ready to advance the ongoing bilateral investment treaty negotiations provided that China is prepared to move forward in negotiating a high-standard and mutually beneficial agreement,” Lew said.

Lew also urged China to remain clear in its communications about foreign exchange policy and implementation.

“A market-determined exchange rate with two-way flexibility will help foster a more efficient allocation of capital,” he said.

Lew said earlier he hoped the two countries would make progress on market access issues as well as the problem of excess industrial capacity in China during this week’s talks.

Wang highlighted the difficulties arising from the rising interest-rate trend in the United States.

“Expectations on interest rate rises by the U.S. Federal Reserve have increased uncertainties on economic growth of emerging market economies,” Wang said.

Speaking later to reporters, Chinese Vice Minister of Commerce Zhang Xiangchen was asked about another area of trade controversy between the two countries, China’s so-called “secure and controllable” provisions.

Foreign insurers have raised concerns about new Chinese cyber security regulations that require “secure and controllable” information technology.

Zhang said concerns over security reviews went both ways.

“The security review issue is a concern of both sides. China also hopes the U.S. can treat Chinese enterprises equally during security reviews and prevent security reviews from becoming a barrier to cooperation between Chinese and U.S. companies.”

Reporting by David Lawder, Michael Martina and Kevin Yao Writing by Megha Rajagopalan and Ben Blanchard; Editing by Will Waterman

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