Five Years Of Preliminaries Later, U.S., China Get Serious-ish About Investment Treaty

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No one waiting out the longest layover in history was going to stymie five years of talks to agree to talk for many, many years to come.

The United States and China agreed on Thursday to restart stalled negotiations on an investment treaty, with Beijing dropping previous efforts to protect certain sectors of its economy from the start….

Talks struck a sour note over China's handling of former spy agency contractor Edward Snowden, who hid out in the Chinese territory of Hong Kong last month as he revealed a secret U.S. surveillance program before fleeing to Russia.

Disputes over cyber security topped the agenda going into this year's talks, which were launched in 2008 to manage a relationship that was growing more complex and tense with China's emergence as major economic and military power….

Explaining China's motives for reopening the investment talks, Chinese Vice Finance Minister Zhu Guangyao said China had about $20 billion of direct investment in the United States and $1.2 trillion in U.S. treasury bills.

"With such an extensive investment relationship, it is necessary for the two sides to have an institutional environment for the protection of these investments," he told reporters….

Analysts and U.S. officials said another factor was a relative reversal of fortunes from previous years, with the United States enjoying economic recovery while China grappled with a slowing economy that showed the limits of its model….

U.S. business groups welcomed the agreement to resume negotiations, but warned that both sides still faced many other tough issues and that negotiations on a treaty could be lengthy. Any pact would need to be ratified by the U.S. Senate.

U.S., China agree to restart investment treaty talks [Reuters]

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