US pushes China on market access, little progress seen

NOV 23, 20157:49 AM

[GUANGZHOU] The United States pushed China for greater market access at annual trade talks in China on Sunday, though few breakthroughs are expected amid tensions over cyber hacking and rules that could hamper foreign tech firms.

Presidents Barack Obama and Xi Jinping agreed in September that neither government would knowingly support cyber theft of corporate secrets to support domestic businesses, but US experts argue Chinese hackers have continued to penetrate US firms.

Those issues, and slow progress on a bilateral investment treaty (BIT), have combined to sour commercial relations, and experts think the meeting of the Joint Commission on Commerce and Trade (JCCT) that ends on Monday in the southern Chinese city of Guangzhou will do little to alleviate the mood.

At the talks, US Trade Secretary Michael Froman called on China to allow "substantial liberalisation" of a so-called"negative list" regulating foreign market access to China.

"Significant work remains," Mr Froman told a business lunch at a venue on Shamian Island, on the banks of the Pearl River, a historical trading port for China and the West over centuries past, in the city formerly known as Canton. "To make it worthwhile, there's no cutting corners and it will take high-level political will to get it right."

China has repeatedly pledged to slacken restrictions on its manufacturing and service sectors, but regulators issued a negative list of prohibited and restricted industries for foreign investors in March. US business lobbies have said it is too broad and must be whittled back.

As it now stands, there are prohibitions on foreign investment in 36 sectors, while 38 sectors are restricted.

Chinese Vice Premier Wang Yang, the most senior Chinese official at the talks who oversees trade and investment, gave no initial indication of Chinese concessions. "We do face some waves or ups and downs in China-US trade relationship," Mr Wang said in a speech.

"What we need to do now is to turn the political will and joint expectation into concrete outcomes of co-operation."

Since 2000, total bilateral trade has grown from US$116 billion to US$590 billion in 2014, US officials said.

US companies in China have also cried foul over pending regulations that would institute "secure and controllable" mandates on foreign technology, which Beijing says are needed to address mounting security concerns under a new national security law, including the threat of terrorism.

Some experts see little likelihood of notable progress. "You never can tell, but I don't expect much forward progress on any specific area, including technology, the BIT, or other elements of market access," said Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies in Washington.

The two sides, however, said they would sign various memorandums of understanding, including China's Sun Paper investing US$1 billion in a pulp mill in Arkansas.

REUTERS