Investment deal to boost bilateral and global trade

China's foreign direct investment in the US, according to reports, increased nine-fold in the past five years. By the end of 2014, Chinese enterprises had invested $46 billion in the US while employing more than 80,000 full-time American workers.

The growth momentum of Chinese investment in the US is certainly impressive, but the total remains paltry given the size of the two economies - $18 trillion and $10 trillion. Worse, the number of Chinese companies subject to US national security reviews is disproportionately high despite China's relatively small investment scale in the US.

Under such circumstances, Chinese policymakers have realized one obvious merit of a high-standard Bilateral Investment Treaty: it will reduce the uncertainties and restraints Chinese companies face when investing in the US.

China will adopt a "negative list", which will open the domestic market wider to overseas investors and facilitate the BIT talks, because Chinese leaders are confident that further opening-up is a necessary and helpful means to promote comprehensive economic reforms. The decisions to deepen reforms in State-owned enterprises and adopt a negative list for investment were made to expedite the country's ongoing economic transformation.

For the US, the benefits of a high-standard BIT will include more jobs that Chinese investment will create for American workers and greater opportunities for American companies to tap into the huge potential of the "unlocked" service sector in China.

China's service sector accounts for about half of its GDP while the US' accounts for 80 percent. Since a booming service sector is critical to China's economic transition toward consumption-led growth, US investors can harvest major benefits by applying their expertise in providing world-class services in China.

Despite the mutual benefit that a BIT will yield, there is no denying the difficulties of the give-and-take course of negotiations. And that is why the two countries should make concerted efforts to encourage cross-border investment in order to make bilateral economic ties the most powerful engine of global economic recovery.

The author is a senior writer with China Daily. zhuqiwen@chinadaily.com.cn