A US-China BIT would bring greater competition to Chinese factories
In a roundtable co-hosted by the Paulson Institute at the annual US-China Joint Commission on Commerce and Trade meeting on December 17 in Chicago, the one thing that both US and Chinese business leaders consistently called for was a level playing field. What’s the smartest way to achieve that goal? A Bilateral Investment Treaty. Here, according to “BIT by BIT,” a Paulson Institute paper, are five reasons a BIT would be good for China:
- Just as China’s World Trade Organization market-access commitments helped accelerate reforms in China, a BIT could serve President Xi Jinping’s reform agenda: by helping reduce domestic economic distortions, increasing market transparency and promoting competition.
- A BIT would help China rebalance its economy away from state investment in fixed assets to greater reliance on consumption—another key reform goal.
- By exposing more Chinese firms to American companies and their managerial expertise, a BIT would help China move up the value chain into innovative industries with higher wages.
- A BIT would help reorient the Chinese economy toward the private sector by increasing the pool of capital available to private companies.
- A BIT would mitigate uncertainty created by the shifting political winds on attitudes toward Chinese investment in the United States.