Investment treaty with China a top priority, US ambassador says
Wall Street Journal | June 25, 2014
Investment treaty with China a top priority, US ambassador says
By RICHARD SILK
BEIJING—The U.S.’s incoming ambassador to China said Thursday that hammering out a new investment treaty between the two countries would be among his priorities.
Max Baucus, the 72-year-old former senator for Montana, was speaking to an audience of businessmen in Beijing in his first public engagement since he took up the post in March.
The U.S. and China are in the early stages of negotiating a bilateral investment treaty, which would open up both countries to investment from the other side.
"There’s a lot of work to do on the [treaty], but moving forward on that will be a top priority for me," Mr. Baucus said.
He downplayed the role of the Committee on Foreign Investment in the United States, the congressional body that serves as a gatekeeper for deals with potential national-security implications. In China the committee is often seen as a major barrier to Chinese investment in the U.S., but that is "more myth than reality," the ambassador said.
The committee has scuttled several Chinese acquisitions, including attempts to buy private jet manufacturer Hawker Beechcraft Inc. and battery maker A123 Systems Inc. It also scrutinized the purchase of Smithfield Foods Inc., America’s biggest pork producer, by a Chinese company last year. The deal was eventually approved.
Mr. Baucus has a long history of striking trade deals. In the 1990s he worked with China’s then-Premier Zhu Rongji to promote China’s entry into the World Trade Organization, a catalyst for internal reform and the beginning of a decade of breakneck economic expansion.
"I believe that the [treaty] could do for China’s investment regime what the WTO did for trade," he said.
Such a deal could create consensus for difficult economic reforms in China. When they were working on the WTO deal, Zhu told the then-senator, "I need you to push from the outside so I can push from the inside," Mr. Baucus recalled. China’s leaders have already pledged to slash red tape surrounding investment approvals, although other changes, such as reducing support for state-owned enterprises, are likely to prove more difficult.
The ambassador nodded toward increasing frustrations in the U.S.-China relationship, noting he disapproved of China’s suppression of political dissidents. The two countries also have "strong disagreements" as to what is acceptable behavior in cyberspace, he said. But he urged discussion, not confrontation, on these issues.
"At moments like this we need more dialogue, not less," he said.
Write to Richard Silk at richard.silk@wsj.com
