US action is key

The success of the China-US BIT talk is dependent on both sides, but more so the United States. By now, the Agreement and Exchange of Note is the only bilateral treaty on mutual direct investment between China and the United States, which doesn't utter a single word about China's investment in the United States.

Since China opened to investment years ago, it has been widely considered a successful example for many countries and regions looking to attract foreign investment. It even gives super-national treatment to foreign investors. With a strong will to constantly improve its investment environment, China welcomes investors from all the corners of the globe to pursue entrepreneurship on its land. The United States has benefited a lot from China's "pro-business" policies and measures.

In the fifth round of the China-US S&ED, China reaffirmed its promise to implement a more active opening up strategy. Now, China is trying to figure out measures to further open up its services industry to the outside world, including setting up a Shanghai pilot free trade zone. In addition, China is motivated to create more efficiency in its economy. It will do its utmost to reduce bureaucracy and give more freedom to enterprises and individuals, making it easier to attract investment.

The United States has grown by absorbing talent and investments from across the world, and hitherto, it has the most propitious business environment for foreign investors. In the United States, legitimate companies are free from concerns over social unrest and blackmail from government officials, which often happen in developing countries. However, it takes a cautious approach in admitting foreign investments from countries that may pose a political threat. Now, many in America see China as a competitive rival, which has turned the United States into an investment destination with the most political risks for Chinese investors.

In 1990, the Bush administration cited the Exon-Florio Amendment to block the acquisition by China National Aero-Technology Import and Export Corp. of MAMCO Manufacturing, Inc. In 2005, China National Offshore Oil Corp. failed to acquire Unocal Corp. In 2011, Huawei Technologies Co. Ltd. was forced to return part of the assets it acquired from 3Leaf Systems, a server technology company.

Countless acquisitions have been denied by the United States to ensure so-called "national security," which has hurt Chinese companies hard. Some American politicians even try to hinder China's investment in other countries. When Hong Kong-listed Hutchison Whampoa obtained the management rights of two ports in the Panama Canal Zone, some American senators attacked it as an attempt to expand China's military presence in the backyard of the United States.

Furthermore, China National Petroleum Corp. and China Petrochemical Corp. were prohibited from exploring for oil in a number of other countries and regions because of US interference. When China's sovereign wealth funds tried to step into credit financing and equity investment, some forces in the United States took it as a sign of a "China threat" rather than as a new channel to introduce Chinese investment into the country.

After the sub-prime crisis, the US Government showed great enthusiasm in attracting foreign investments to promote employment, and the "Choose America" plan pushed by President Barack Obama aimed to expand investments from emerging countries like China. However, China is hardly motivated to directly invest in the United States. In this sense, it serves both sides to promote BIT talks to enhance openness and transparency, especially on the side of the United States.

Only by taking concrete steps can the United States create a more fair investment environment and bring more opportunities for both Chinese and American enterprises.

The author is a researcher with the Chinese Academy of International Trade and Economic Cooperation