SelectUSA round 2 gears up

The US government said it is reviewing the Waldorf case after Hilton Worldwide Holdings Inc announced in October that it would sell the hotel and residences to China's Anbang Insurance Group Co Ltd.

Such investigation has again triggered concerns among some Chinese that Chinese FDI in the US is discriminated against due to the deep distrust between the two governments.

Thummalapally said he does not want to speculate on whether the Waldorf purchase will get a pass or not.

China has been actively pushing forward the negotiation of a Bilateral Investment Treaty, which it hopes will provide better protection to the growing Chinese FDI in the US.

During US President Barack Obama's trip to Beijing in November, the two countries committed to continue to pursue BIT negotiations as a top priority in their economic relations.

Christopher Johnson, senior advisor and Freeman Chair in China Studies at the Center for Strategic and International Studies, said on Tuesday that concluding the BIT with the US should be primary focus now for Chinese leaders.

Maurice Greenberg, former chairman and CEO of American International Group, and Fred Bergsten, a senior fellow at the Peterson Institute for International Economics, are more ambitious, calling for a free trade agreement between China and the US.

In a co-authored op-ed in the Wall Street Journal last month, they argued that there seems to be no compelling reason why the world's two largest economic powers shouldn't start the process of establishing a comprehensive, bilateral free trade agreement.

"We've argued in favor of such an agreement for years, and on many trips to China top leaders have told us that they would be receptive to such an initiative," they wrote.

According to the Peterson Institute recent study Bridging the Pacific,such a trade agreement would be of great benefit for both countries. US exports would increase by almost $400 billion a year, and US national income would rise more than $100 billion annually. There would be 1.7 million export-related jobs added to the US economy over 10 years, and American consumers meanwhile would benefit from lower prices and wider product choices.

China's national income would increase by more than $300 billion a year, helped by a dramatic boost in foreign direct investment between the two countries, according to the report.

At present, the US has in China about $50 billion of FDI stock (about 2 percentof China's total FDI), while China's FDI in the US is around $36 billion.

"With a bilateral free-trade agreement in place, US FDI could rise in five years to $160 billion, and China's FDI in the US could rise to $122 billion. This would help reposition the US —the world's leading investor —to benefit from future growth in the world's second-largest economy," wrote Greenberg and Bergsten.

In the 2014 A.T. Kearney Foreign Direct Investment Confidence Index, the US and China respectively are the top two on the list of countries where corporate executives say they are most likely to direct their foreign investment.

chenweihua@chinadailyusa.com