China's Finance Minister Lou Jiwei is not comfortable with some of the stipulations in the negative list that the US proposed as part of the bilateral investment treaty (BIT) between the two countries, according to a report by the Xinhua News Agency on April 20.

Specifically, Lou is uneasy with the vagueness of the US negative list, which catalogues the sectors of the American economy that Chinese companies are either prohibited or restricted from investing in. He said the list does not specifically define restrictions on technology, national security and key infrastructure investment. More importantly, the list stipulates that the US government retains the right to suspend projects invested or operated by Chinese companies at any point, with investors responsible for any losses. This requirement would make it extremely risky for Chinese investors to put money in the US market.

In contrast, the Chinese government has reduced the number of items on the negative list for its four free trade zones from 139 items to 122 items. The updated list came out on April 20.

The BIT talks are ongoing, so it is understandable for the US to set a tough threshold at the start. It only means the Chinese representatives will have difficult fight ahead of them to further the interests of Chinese investors eyeing the US market.

The author is Zhang Jingwei, a commentator.

National Business Daily