Infrastructure key to the future

China and the United States agreed Wednesday to strengthen cooperation on infrastructure while calling for an acceleration of talks on a bilateral investment treaty.

"This year's dialogue led to new consensus on infrastructure investment between China and the US," Chen Wenling, chief economist at the China Center for International Economic Exchanges, said at the closing of the Sixth Annual US-China CEO and Former Senior Officials' Dialogue, held in Beijing this week.

"Both sides agreed there are tremendous investment opportunities and huge potential, and urged the governments to conclude the bilateral investment treaty negotiations as soon as possible," Chen said.

A report, Promoting Bilateral Investment in Infrastructure in China and the US, released by the CCIEE on Wednesday, said the economies of China and the US will "remain complementary for a long period of time".

The two countries' commitment to adjusting their economic structures contains "huge opportunity for bilateral investment, particularly that for infrastructure investment", according to the report.

The report estimated that by 2020, upgrading infrastructure in the US will require $3.6 trillion, and the shortage of funds will total $1.6 trillion. China and the US, it said, have great potential to cooperate in science and technology investment, energy, environmental protection investment, manufacturing and agriculture.

The need for infrastructure investment in the US in energy, transportation and water is estimated at $8 trillion and could reach $30 trillion, said Jeremie Waterman, executive director for greater China of the US Chamber of Commerce, citing the chamber's report, From International to Interstates: Assessing the Opportunity for Chinese Participation in US Infrastructure, which was released in October 2013.

"Investment in water here is a significant need for China and also a potential significant opportunity for foreign investors, including US investors in China. ... The needs are enormous; there is certainly potential for significant mutual benefits like water investment, and I think we are going to see a lot more investment tied to China's urbanization in the energy and environmental areas," Waterman said.

But challenges to cooperation between the world's two largest economies remain: for example, the slow progress of the Sino-US BIT talks, insufficient strategic mutual trust, language barriers and cultural gaps, and a lack of understanding on each side of the other's investment environment, the CCIEE report said.

"The BIT negotiations must speed up, and we expect them to be concluded by the end of 2015," said Wei Jianguo, vice-chairman of the CCIEE. "Meanwhile, we should introduce innovations and use the gains from China's accession into the World Trade Organization to accelerate the BIT talk process."

Myron A. Brilliant, executive vice-president and head of international affairs of the USCC, said the business community sees the BIT as "steppingstones to even bigger things in the relationship".

"We talked about ultimately hoping to have a US-China Free Trade Agreement, not something that can be accomplished in the short term, but longer term, it should be the aspirations not only of the business communities but of the two governments," he said.

"We even talked about having a step, in between the BIT and FTA, to promote a BIT-plus-trade element. All this reflects that there is a lot of ongoing negotiations between China and the US," Brilliant added.

The two sides also agreed to consolidate the WTO system, including expanding and concluding the Information Technology Agreement, according to a joint statement on the dialogue.