US-China CEO Bilateral Investment Dialogue


New York City

February 12, 2015

Overview

Increased investment between the US and China would bolster the overall bilateral relationship and drive global economic growth.

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Video: US-China Investment

Robert Zoellick, chairman of Goldman Sachs International Advisors, discusses the history behind and context for an enhanced US-China investment relationship.

WATCH VIDEO

Goldman Sachs Research

We are pleased to share research from the Goldman Sachs Global Markets Institute, “Harnessing Global Capital to Drive the Next Phase of China’s Growth.”

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Bilateral Investment Treaty Primer

Faryar Shirzad, global co-head of the Office of Government Affairs at Goldman Sachs, and Matthew Rees, president of Geonomica, explore the current economic relationship between the United States and China and the opportunities that a US-China Bilateral Investment Treaty (BIT) presents for both countries.

READ THE PRIMER

Media

Articles and op-eds from Goldman Sachs leaders and others.

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Overview

The United States and China have one of the largest and most important economic relationships in the world. Both countries have benefited significantly over the last forty years as this economic relationship has expanded. Our economic exchanges have created tremendous export opportunities in a wide range of sectors, brought new choices to consumers, and created jobs and raised the standard of living for both countries.
 
Trade flows have been the primary driver behind this relationship to date. The United States is China’s largest trading partner, while China is the United States’ second-largest trading partner and the largest purchaser of US government securities. The two countries exchanged over $500 billion in goods in 2014, and together have generated 40 percent of the world’s total GDP growth in recent years.   

While trade has grown dramatically, investment is the next frontier in the evolving economic relationship between China and the United States. Investment between the two countries is far below potential but growing rapidly. China is in the midst of a transition from an economy driven by investment in industrial sectors toward consumer-driven growth. US companies are eager to invest in these growing sectors of the Chinese economy as the government opens the door to foreign investors. At the same time, the private sector in China is increasingly open to and sophisticated about investing in the United States as Chinese corporations take a more global profile. As a result, investment between the United States and China has the potential to expand dramatically, spurring job creation and economic growth with profound implications for both countries and the global economy.  

The governments of both countries recognize that there is a real opportunity to catalyze US-China investment by pursuing a US-China Bilateral Investment Treaty (BIT) as a means to further open their markets to investors. The commitment of both governments to accelerate these negotiations is a historic step in the broader relationship between the two countries. A BIT would create a transparent framework for facilitating cross-border investment. Such an agreement would eliminate many of the restrictions that impair US investors from investing and competing in various sectors of the Chinese economy. 

Goldman Sachs convened the US-China CEO Bilateral Investment Dialogue on February 12, 2015. The Dialogue brought together CEOs, policymakers, state and local officials and key thought leaders to underscore the opportunity that exists for both countries to expand bilateral investment, including through the completion of the BIT negotiations. Over the course of the day, participants discussed the existing trade and investment relationship between the US and China, China’s evolving role in global markets, and the opportunities that exist to catalyze the economic relationship for the benefit of both countries. The four Dialogue hosts – Goldman Sachs, the Paulson Institute, the US-China Business Council and the China Development Research Foundation – used this dialogue to strengthen understanding between key stakeholders in both economies, and to mobilize the support of the business community for further growth in the economic relationship, including through the successful conclusion of the US-China BIT.

What are the Opportunities Created by Increased Investment between the US and China?

We asked some of the participants at the US-China CEO Bilateral Investment Dialogue for their thoughts on what increased investment between the US and China could mean for both countries.

US and China Investment [4:41]

THE US-CHINA BILATERAL INVESTMENT RELATIONSHIP: OPPORTUNITIES AND CHALLENGES

Robert Zoellick, chairman of Goldman Sachs International Advisors, discusses the history behind and context for an enhanced US - China investment relationship. 

US-China Investment Opportunities [3:10]

Goldman Sachs Research

EXECUTIVE SUMMARY
Harnessing global capital and the skills that come with it is key to the next stage of China’s economic growth, according to a paper by the Global Markets Institute at Goldman Sachs. A team led by Andrew Tilton, Goldman’s chief Asia economist, identifies two channels to help China reduce its reliance on manufacturing exports and debt-financed investment: increased foreign direct investment in the services sector, and continued reform of the country’s financial markets. Read Harnessing Global Capital to Drive the Next Phase of China’s Growth.

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Podcast: 'Exchanges at Goldman Sachs'

Episode 5: The Future of the US-China Economic Relationship


Mark Schwartz, a vice chairman of Goldman Sachs and chairman of Goldman Sachs Asia Pacific, discusses China’s growth, reform efforts, and prospects for an enhanced investment relationship with the United States.
Listen Now

RESEARCH FROM PARTNERS AND OTHER EXPERTS 

Explore the opportunity for a stronger US-China economic relationship.

Rebalancing China's Energy Strategy

- The Paulson Institute Read Report The Paulson Institute, an independent center located at the University of Chicago, is a nonpartisan institution that promotes sustainable economic growth and a cleaner environment around the world.

Summary of US Negative Lists in Bilateral Investment Treaties

- US China Business Council Read Report The US-China Business Council, Inc. (USCBC) is a private, nonpartisan, nonprofit organization of roughly 220 American companies, whose mission is to expand the US-China commercial relationship for the benefit of its membership and, more broadly, the US economy.

Toward A US-China Investment Treaty

- Peterson Institute for International Economics Read Report The Peterson Institute for International Economics is a private, nonprofit institution for rigorous, intellectually open, and in-depth study and discussion of international economic policy.

In the papers presented in the Research From Partners and Other Experts section above, the views and opinions expressed are those of the authors; the papers are presented for informational purposes only and do not constitute any investment advice or recommendation by Goldman Sachs.

Bilateral Investment Treaty Primer

Faryar Shirzad, global co-head of the Office of Government Affairs at Goldman Sachs, and Matthew Rees, president of Geonomica, explore the current economic relationship between the United States and China and the opportunities that a US-China Bilateral Investment Treaty presents for both countries. 

READ PRIMER

MEDIA

Articles and op-eds from Goldman Sachs leaders and others.

-  A BIT of Help for the U.S. and China: A proposed bilateral investment treaty would boost growth on both sides by Mark Schwartz; April 2014

-  International treaties can once again help China advance by Robert Zoellick; March 2014 [Subscription Required]

-  Why an Investment Treaty with China Matters by John Frisbie, President of the USCBC; March 2014

-  A Treaty Setting New Investment Rules: Exploring the merits of a bilateral investment treaty between the U.S. and China by Erin Ennis, Vice President of the USCBC; December 2014 [Subscription Required]

-  VIDEO: Goldman Sachs CEO Lloyd Blankfein discusses US-China investment from CCTV America

 

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