China's Finance Minister hits at U.S. 'negative list' - Xinhua

BEIJING (Reuters) - China's Finance Minister Lou Jiwei criticised the U.S. proposal for sectors to be closed to foreign investment under a Bilateral Investment Treaty (BIT) that is currently being negotiated between Washington and Beijing, state media reported. Lou said that the U.S. negative list, while outlining prohibitions on key infrastructure, technology and national security investment, failed to provide specific definitions over its restrictions, the official Xinhua News Agency reported. "The stipulation increases the uncertainty for Chinese investors in the United States and make us feel very uncomfortable, " Lou said, without elaborating. He was speaking in Washington D.C. on the sidelines of the World Bank and International Monetary Fund meetings. Negative lists are a pivotal element in negotiations between China and the United States to conclude the BIT. Last month, U.S. Treasury Secretary Jack Lew said it was "critical" that China's negative list be short. Some experts believe China's list will be a barometer for how serious the country's leaders are about their promised market reforms. On Friday, China's vice finance minister Zhu Guangyao said he expects China and the United States to exchange 'negative list' offers in the next month or so. Zhu said he would expect "substantial" progress on the issue in September, when China's President Xi Jinping meets with U.S. President Barack Obama in Washington, though he added that much hard work remained on the trade front between the two countries. In its annual position paper released on Tuesday, the American Chamber of Commerce in China said it was hopeful that China "will seriously and significantly" open up further to foreign investment, especially in the financial services, agriculture, automotive, and healthcare sectors. "An overreaching negative list will be a non-starter," the Chamber said. China's restriction on foreign investment in the name of national security are too broad, Chamber Chairman James Zimmerman told reporters, adding that in the United States, Chinese investors had more avenues for recourse within courts. "Here, without that oversight, the politics can drive some of the decision making," Zimmerman said. Recent trade tensions between the world's two largest economies have revolved around cybersecurity policies. China's bank regulator last week temporarily suspended new financial industry rules that would have required firms to release product source codes to inspectors after an outcry from foreign business groups and the U.S. government. "It was suspended, but that doesn't mean it's resolved," Zimmerman said. "Information security is very much a concern." (Reporting By Michael Martina and Matthew Miller; Editing by Simon Cameron-Moore)