US and China firms sign whopping deals

American and Chinese firms signed Monday deals worth $13.6 billion ahead of a high level meeting that could formally endorse talks for a bilateral investment treaty, officials said. Beijing said the agreements inked in Washington and St Louis, Missouri were part of plans by Chinese companies to increase imports from the trade deficit-ridden United States. The deals gave a psychological boost to the two-day US -China cabinet-level "strategic economic dialogue" (SED), which will grapple with wide ranging issues beginning Tuesday at the Naval Academy in Annapolis, east of Washington. Thirty-five deals worth $8.3 billion were signed by high-tech, manufacturing and telecommunication companies at the US Chamber of Commerce in Washington, the Chinese government said in a statement. The chamber said among US firms linked to the deals were General Motors, Texas Instruments, Cisco, Ford, IBM, Oracle and Motorola. Chinese firms included dominant local cellphone operator China Mobile. In St Louis, companies from the two nations signed contracts valued at $5.32 billion for the purchase of soybeans as well as chemical, telecommunication and electromechanical products, the statement said. The deals will contribute to the "healthy development" of US -China ties and signify "an important part of the series of programs taken by Chinese business people to increase imports from the United States," said Chinese Commerce Minister Chen Deming as he witnessed the signing of agreements in Washington. The United States is saddled with a ballooning trade deficit with China, which hit a record $256.2 billion last year. "These partnerships will stimulate American jobs and contribute to our country's economic growth," said US Chamber President Tom Donohue. Also witnessing the Washington event was Chinese Vice-Premier Wang Qishan, who will lead the Beijing team to the Annapolis talks. The US side will be led by Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke. With their economies in crisis, the top officials from the United States and China will grapple with wide ranging issues - financial sector reforms, currency concerns, protectionist pressures, energy security as well as trade and product safety, and investment. They are expected to announce the beginning of talks for a key investment pact at the end of the talks, business officials said. "It is our understanding that one of the possible outcomes could be the launch of formal negotiations of a bilateral investment treaty," US -China Business Council President John Frisbie told AFP. The US State and Treasury departments as well as the office of the US Trade Representative had held initial talks with their Chinese counterparts throughout 2007 on the treaty. If the two powers decide to pursue the treaty negotiations, benefits could include enhanced and non-discriminatory market access for investments, more transparent laws, and guarantee of due process for investors. Chinese investors are reportedly concerned about a US investment review process that Washington says is targeted to address acquisitions that raise real national security concerns. American companies fear that China's interest in foreign investment is no longer as robust as before, that foreign investment regulations are opaque and seem to be designed to favor Chinese "national champions," US officials said. These concerns include Beijing's implementation of the new anti-monopoly law, protection of specific Chinese competitors rather than competition in general and treatment of foreign firms more harshly than Chinese firms, they said. "A bilateral investment treaty would provide additional protections to investors from each country and the other country and goes beyond what was in the World Trade Organization entry agreement, for example," Frisbie said. Paulson said the dialogue this week would discuss "the best way to promote and protect bilateral investment and counter protectionist pressures."