Interdependence makes treaty a must
- By Zhang Lijuan
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E-mail China.org.cn, July 10, 2013
The U.S. economy is mainly a service economy, while the Chinese economy is a manufacturing economy. American jobs must be created by capital-intensive industries. Chinese investment will not only increase capital liquidity, but also create jobs. On the other hand, U.S. businesses are more likely to further invest in the Chinese market to localize production facilities and establish R&D centers. The continuing expansion of Sino-U.S. economic interdependence is inevitable and the best way to reach an agreement on bilateral investment issues is through a bilateral investment treaty (BIT).
Financial issues are critical for China's further economic development. We have seen the success of consensus building and the mutual understanding generated on the question of RMB appreciation. The truth is that joint efforts aimed at solving bilateral issues have proven to be the best option for a prosperous bilateral relationship. Any inappropriate reform related to China's banking, capital market and other financial sectors may cause economic and/or political turbulence, not just in China but also in the U.S. and global market. Therefore, the U.S. and China have every reason to team up on certain strategic issues as both sides hope for stable financial markets in the global context.
There is no doubt that both the U.S. and China are the world's largest recipients of global FDI, and both nations are highly competitive in terms of attracting global FDI. Given that both countries have their own distinct advantages for attracting FDI, their shared common interests are far more prominent than their conflicts.
S&ED itself is strategic because both the U.S. and China have an economic and geopolitical role to play in today's world. Consensus building between the U.S. and China is crucial if many outstanding multilateral and regional issues are to be properly addressed. This is true for regional conflicts, security concerns, as well as multilateral issues such as climate change.
Against this backdrop, it is our hope that S&ED continues to play its critical role in building a new type of bilateral trade and economic relationship between the world's two big powers.
The author is a columnist with China.org.cn. For more information please visit: http://m.formacion-profesional-a-distancia.com/opinion/zhanglijuan.htm
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