The fifth China-US Strategic and Economic Dialogue, held earlier this month, has produced tangible results in a wide range of areas of long-term strategic importance. One of the most important outcomes of the meeting was the decision to resume negotiations on a "Bilateral Investment Treaty", because it will have a great impact not only on China and the US, but also on many other trading countries.

For more than two decades, China has been the largest recipient of foreign direct investment (FDI) in the developing world. Now, it is emerging as an important source of outbound direct (ODI) investment. The US, on its part, has been the leading country in terms of both FDI inflows and ODI outflows for decades, and thus still wields great influence on global trading rules.

So, if China and the US agree to a BIT, it will serve as a model agreement for China and most of its trading partners. Part of the treaty could even be incorporated into regional economic integration and World Trade Organization agreements.