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High-Quality BIT and QPQ cplan

Opening Biz

Take notes here

Opening warning – this discussion is pretty complicated … so don’t be afraid to ask questions.

What can you tell me about Saddam Hussein ?...

What can you tell me about the Arab Spring ?...

A fundamental argument on this year’s topic – how the US change PRC conduct ?...There are two major options.

What is a High-quality BIT ?... What is a low-quality BIT ?..

Why is a high-quality BIT good ?...

How does the Aff cause a lower quality BIT ?...

We’ve mostly discussed QPQ’s in the context of Topicality – but the Neg can also run a QPQ as a Cplan. Here, they are running one versus a non-QPQ Aff.

Speech set-up and background info

Background info:Get out flow paper or borrow some.

For the purposes of this in-lab mini-debate, assume that the Aff ran the packet Aff… and read the following plan text:

CFIUS reviews of investment projects from China should enhance transparency and fulfill a standard of most favored nation, non-discriminatory treatment.

Further assume that the Aff read these advantages:

relations adv (ECS and Warming modules) and the Protectionism adv .. but, aff did not read the Chinese economic growth advantage.

Speech Order:We will have one person read the 1NC shell – below – for the group. It’s a pretty easy task.

We will call on a few people to role-play as the aff – and to cx the 1NC for up to 60 seconds.

We will then have one person read the 2AC answers to the cplan – below – for the group. Also an easy task.

We will call on a few people to role-play as the neg – and to cx the 2AC for up to 60 seconds.

The task:Everyone should prep a 2NC vs. the 2AC aff answers to the cplan. The 2NC will have no more than 4:00 mins to extend the cplan and the “high quality” BIT internal net benefit.

1NC and 2AC

1NC – text

Text:

The United States federal government should offer non-discriminatory and transparent CFIUS reviews of investment projects from China in exchange for China’s willingness to agree to a high-quality Bilateral Investment Treaty with the United States. The term “high-quality” would require China to agree to reduce protections for Chinese State-Owned Enterprises and to further narrow its “negative list” of sectors exempt from a Bilateral Investment Treaty with the United States.

QPQ approach solves – China will “swap” a shorter negative list if they get a transparent CFIUS process from the US.Chen ‘15

Chen Jie is a journalist and editor with The Xinhua News Agency. This evidence internally cites Li Daokui, director of Tsinghua University's Center for China in the World Economy and Jeffery Schott, senior fellow at the PIIE. The PIIE is The Peterson Institute for International Economics, and is a private and non-profit think tank focused on international economics, based in Washington, D.C. According to the 2014 Global Go To Think Tank Index Report (Think Tanks and Civil Societies Program, University of Pennsylvania), Peterson is number 15 (of 150) in the "Top Think Tanks Worldwide" - “China, U.S. pin high hopes on Xi's visit for breakthrough in BIT talks” - Source: Xinhua- Sept 20th - http://english.chinamil.com.cn/news-channels/pla-daily-commentary/2015-09/20/content_6689649.htm

The two countries confirmed the BIT negotiations as "a top priority" in their economic relationship, hoping to further boost

economic cooperation and achieve a win-win result through investment liberalization. Officials and experts from both sides believe that a high-standard BIT will not only benefit the top two economies in terms of boosting mutual investment and job opportunities, but

also conduce to the global economy. Nathan Sheets, undersecretary for international affairs at the U.S. Treasury, stressed the benefits that U.S. investors will harvest. "Such an agreement could be a game changer in terms of unlocking new opportunities and leveling the playing field for U.S. firms and investors," he said in

April. " A high-standard BIT, with strong provisions for market openings and equal treatment, would greatly benefit the commercial relationship," U.S.-China Business Council President John Frisbie said two months later. Geoffrey Sant, special counsel of Dorsey & Whitney LLP, spoke out his similar opinion in a recent interview with Xinhua. "A BIT would be extremely beneficial to both nations by more closely intertwining the two nations' economies," he said. "Chinese investors in the United States will benefit from U.S. growth, and U.S. investors in China will benefit from Chinese growth." Such a treaty will help address a number of investment concerns of the United States and China, and investors from both countries will get better access to each other's markets, said Yukon Huang, former World Bank's country director for China and senior associate with the Asia Program of the Carnegie Endowment for International Peace. Li Daokui, director of Tsinghua University's Center for China in the World Economy, has seen some other advantages the treaty will bring about to the two countries. China and the United States are complementary in many areas, especially in capital, Li told Xinhua recently. The United States needs large capital for infrastructure construction so as to prompt its economic recovery, while China, with relatively abundant funds, has already become a net exporter of capital, he said. Also, the Chinese government has been following a strategy of "going out" to encourage firms to invest overseas. On a broader scale, the China-U.S. relationship cries out for a stabilizer to address sensitive and complicated issues emerging in the development of bilateral ties, the Chinese economist

said, adding that the BIT will serve as such a stabilizer in the future. HIGH HOPES FROM BOTH SIDES The BIT talks started in 2008 when China

and the United States sought to increase mutual investment. But little progress had been made before they agreed in 2013 to conduct negotiations on the basis of pre-establishment national treatment with the negative list approach, which outlines sectors closed to foreign investment. A new phase of talks opened in June, as the two sides made an "important milestone" exchange of initial offers of negative lists. Last month, negotiators discussed profoundly the pending second negative lists in Beijing at the 20th round of BIT talks. Xi's state visit to the United States, the first since he took office in 2013, has been regarded widely as a golden opportunity to make major advancement in the negotiations, as the issue is expected to top the agenda of a planned meeting between Xi and his U.S. host,

President Barack Obama. Ahead of the summit, government officials and scholars, among others, from both countries expressed optimism about a positive result in the BIT talks. Chinese Vice Finance Minister Zhu Guangyao said in June that China hopes

to conclude the negotiations under the Obama administration , which will end in January 2017. Zhu voiced

the hope that the second negative list offers will produce substantial improvement so that the two heads of state could confirm "major progress" at their summit and give further clear instructions to both negotiating teams to move on. U.S. Treasury Secretary Jacob Lew believed that the summit could inject new momentum to the BIT talks. "I think the fact that there's a leaders' meeting happening will focus all of the efforts to make progress for that," he said earlier. U.S.-China Business Council President John Frisbie has urged both governments to "double their efforts to advance the negotiations" on the treaty as much as possible before Xi's visit. David Denoon, New York University professor of Politics & Economics and director of NYU Center on U.S.-China Relations, echoed Frisbie in a recent interview with

Xinhua. "The two of them (Xi and Obama) can cooperate together to reach some agreements here. Also, I think the bilateral investment treaty should move as far as possible," he said. It would be "a very healthy thing" if the two leaders could show some real progress towards reaching the treaty, said Fred Bergsten, a senior fellow and director emeritus at the Washington-based Peterson Institute for International Economics (PIIE). "President Xi's visit is an important step, maybe a final one, to push ahead with the BIT talks, as both leaders have strong willingness to achieve a breakthrough," said Li Daokui, director of Tsinghua University's Center for China in the World Economy. The Chinese expert predicted that Obama "will

make a big issue on international affairs, including the BIT," as the end of "his presidential term" is approaching. JOINT EFFORTS TO CRACK NUTS Though both sides share a strong aspiration for a treaty to facilitate and boost bilateral investment, the BIT negotiations have by no means advanced as smoothly as

expected given complicated situations. Further unremitting efforts from both countries are called for to crack the hardest nuts -- to hammer out shorter and better negative lists from both sides, among other difficulties. Denoon said "there are many areas on the negative list in China and many areas on the negative list in this country," adding " how to get a good trade among

those is not easy to work on." The negative list approach, generally viewed as more liberal to foreign investment, means that all sectors are open to foreign

investment except those listed, while the positive list approach, adopted by China for many years, means that only listed sectors are accessible to foreign

investment. Zhang Xiangchen, Chinese deputy international trade representative and assistant minister of commerce, told reporters in June that "the negative list issue is more difficult for China," as it "represents a new challenge" and will "fundamentally change the foreign investment administration regime in China." To produce the negative list and speed up the process of the negotiations, China has done tremendous work. An inter-ministerial mechanism in the State Council have been established, and "tens of thousands of laws, regulations and rules" governing foreign investment with the positive list

approach have been reviewed, according to the official. For the United States, aside from an improved negative list, its investment environment for Chinese enterprises calls for urgent improvement. Many Chinese companies have been put to the Committee on Foreign Investment in the United States (CFIUS ), an inter-agency organization tasked to review foreign

investors' acquisition activities in the country, for national security reasons . The number of Chinese companies subject to such reviews is disproportionately high considering China's relatively small investment scale in the United States. As a result, Chinese firms are facing rising uncertainties and restraints when investing in the U.S. soil. Jeffery Schott, senior fellow at the PIIE, said there is a need to improve the transparency of the CFIUS . "What the BIT can do is to increase the transparency of the CFIUS procedure to ensure that it is a narrowed focus." China hopes that the U.S. side could treat Chinese enterprises equally , remove its discriminating practices , and drop the wrong hypothesis that all Chinese investments have a governmental background with untold political and military motives, Li said.

Our internal net benefit is that a High-Quality BIT is good.

The Aff and permutation would lower US negotiating standards for the sake of completing a deal. That hampers higher-quality BITs that crackdown on Chinese SOEsDonnelly ‘13

Ambassador (Ret.) Shaun E. Donnelly formerly served in a series of senior economic policy assignments at the US Department of State, as Assistant US Trade Representative for Europe and the Middle East and as US Ambassador to Sri Lanka and Maldives. “Perspectives on topical foreign direct investment issues” by the Vale Columbia Center on Sustainable International Investment - Columbia FDI Perspectives - No. 90 March 4, 2013 - http://ccsi.columbia.edu/files/2014/01/FDI_90.pdf

I agree with Sauvant and Chen at that broadest level, but my sense of what an acceptable US-China BIT would look like, and how one would get there, is very different. Their analysis seems to be that, on key issue after key

issue, one must split the difference between fundamental US and Chinese positions — in other words, you cut the

baby in half. I disagree; you do not get to the sort of comprehensive 21s' century BIT both sides need by splitting the difference down the middle between an ambitious, market-opening text on one hand and a text allowing for screening,

government interventions, protected monopolies, and protected state-owned enterprises ( SOEs ) and national champions on the other hand. Make no mistake. China has come an incredibly long way in its investment policies, as in so many other areas, over the past 30 years. China deserves, and generally receives, strong recognition from the international business community. But China has not yet established an open, market-based investment regime. Far from it. Screenings, controls, restrictions, informal pressures, forced localization, and political interventions unfortunately remain central to the Chinese investment system. Sauvant and Chen suggest that, on areas they identify as "more pronounced" "differences"2 such as: I) performance requirements, 2) labor and environment standards, 3) investor-state dispute settlement, 4) national treatment, including pre-establishment, 5) non-conforming measures, and 6) sectoral carve-outs and restrictions, the inevitable way

forward lies in splitting the difference between Chinese and US positions. A "split the difference" approach may offer the best chance for a quick agreement. It does not offer the best path to an agreement that can protect,

encourage and catalyze FDI flows between the US and China in both directions. Or to an agreement that would actually give

China what it wants in terms of clearer access into the US or building its own economy. Rather, both parties need a high- standard , comprehensive agreement that ensures real protections, real transparency, real dispute settlement, and real market-opening to investors from both sides. I believe the 2012 US Model BIT provides a template for such an agreement. Obviously in serious negotiations , there will need to be compromises, additions, tweaks, phase-in

periods, and limited exceptions. I believe, for example, we need to enhance existing BIT provisions on SOEs and cross-

border data flows on any US-China BIT. But simply splitting the differences on core BIT protections as a quick path to a US-China BIT and a possible template for a multilateral investment agreement will not pass the "smell test" with US business, the US Administration or the US Congress. Let us all accept the reality that a US-China BIT is very important for both sides and for the world but it is not a short-term deliverable, it is not going to be an easy "feelgood" negotiation and it is not a split-the-baby proposition.

A BIT won’t solve for the Chinese economy unless it’s high-quality. That’s key to check economic meltdown and spiraling unrest.

Held ‘16

Robert Held is a financial consultant operating out of Geneva, Switzerland. He holds degrees from Wake Forest University and The University College, London - “China: Why reciprocity in market access is pivotal” – Asia Times - June 29, 2016 - http://atimes.com/2016/06/china-why-reciprocity-in-market-access-is-pivotal/

In the US, China pushed through deals worth more than $33 billion until May this year, a massive surge compared to last year’s rather fickle

$2.9 billion of deals finalized in the same period. However, distrust towards Chinese SOEs is growing fast, as national security concerns render some of the proposed outbound deals involving Chinese firms under increased scrutiny. The largest such deal, between ChemChina and Swiss agricultural company Syngenta, is currently being investigated by the Committee on Foreign Investment in the United

States (CFIUS) and by the US Department of Agriculture (USDA). Given the mounting problems that SOEs are facing abroad,

it is high time China opened up its economy to foreign investment as well. What’s more, a recent groundbreaking EU ruling has increased the pressure on Chinese SOE business ventures abroad. Analyzing a joint venture’s consequences in relation to other Chinese SOEs operating in the nuclear sector in other markets, the ruling introduced an expanded review process that focuses on all the assets managed by China’s Central SASAC [State-owned Assets Supervision and Administration Commission of the State Council] active in a given industry. As Reuters reported, the decision effectively adds an extra barrier that could either scuttle of delay future Chinese SOE mergers, which will now be forced to go through a lengthy approval process in Europe. Moving in the right direction? Although the high-level eighth Strategic

and Economic Dialogue between the US and China yielded only few results, such as China agreeing to extend a rather symbolic RMB 250

billion Qualified Foreign Institutional Investor quota to the US, officials from both countries emphasized their desire for concluding the Bilateral Investment Treaty ( BIT ), which had been stalled for years, raising hopes China is officially ready to allow

http://atimes.com/2016/06/china-why-reciprocity-in-market-access-is-pivotal/

more foreign investment to flow in. Indeed, the biggest stepping-stone in concluding the BIT between the two

countries so far has been China’s lack of reciprocity , namely its barring of foreign investors from entering a

number of protected economic sectors. Hence , bringing China to downsize the “negative list” of off-limits sectors

is pivotal in reaching an agreement – which is precisely what Beijing promised would do on June 6. While signs seem positive in that regard,

the economic benefits that China could reap from a BIT could be rendered void by China’s systemic

internal shortfalls unless the Chinese leadership decides to embark on economic reforms in earnest.

Without more reform, concerns that the People’s Republic under Xi Jinping’s aegis will go down a dark path, characterized by the continuous sheltering of the dysfunctional state enterprise sector, a sector that lives under CCP’s wing, will only grow. As David Dollar of the Brookings Institution pointed out, SOEs tend to dominate sectors such as finance, telecommunications, transportation, and media. Ever since China began to readjust its growth model, “these service sectors are now the fast-

growing part of the economy, while industry is in relative decline.” However , if China hopes to maintain good economic growth rates in the years to come and stave off potential civic unrest , access to international funding,

investment and competition is crucial. The net outcome of bringing BIT negotiations to a fruitful conclusion would signal a greater amount of trust between the world’s two largest economies. And considering their ongoing geopolitical competition around the South China Sea, that may go beyond the economic realm. Indeed, a BIT would alleviate a variety of issues for both countries. First, it could be a sensitive way of compelling China to commit to its own goals of opening up these sectors to competition and private international investment.

Second, according to the US-China Business Council (USCBC), a “high-quality US-China BIT would give American companies better access to China’s market, and equal rights as Chinese firms, [and] provide American companies with a better opportunity to expand in China.” Third, a BIT could help alleviate Chinese concerns over the activities of the CFIUS. China has a long history of complaining about the CFIUS blocking its investments into the US, but a BIT could lead to greater transparency in the review process and

clarification of review criteria for both private firms and SOEs. Unless China starts showing sincere goodwill to foreign investors by

allowing reciprocity in market access, mistrust towards the intentions of Chinese SOEs can only rise. Defensive measures against SOEs will become more stringent as well, leading to the possibility that Syngenta’s trials in the US and, even more

dramatically, in the EU, could become the norm. The writing’s on the wall: reciprocity can no longer be postponed by Beijing without hurting its own interests.

Chinese Econ growth checks nationalist flares that escalate territorial disputes. Checks won’t solve.

Blackwill & Campbell ‘16

Robert Blackwill is a senior fellow for U.S. foreign policy at the Council on Foreign Relations (CFR). Blackwill was the Belfer lecturer in international security at Harvard Kennedy School. During his fourteen years as a Harvard faculty member, he was associate dean of the Kennedy School, where he taught foreign and defense policy and public policy analysis. He also served as presidential envoy to Iraq and was the administration's coordinator for U.S. policies regarding Afghanistan and Iran. Kurt M. Campbell is the chair and chief executive officer of the Asia Group, LLC. He also serves as chairman of the Center for a New American Security, is a nonresident fellow at Harvard Kennedy School's Belfer Center for Science and International Affairs. “Xi Jinping on the Global Stage” - Council Special Report No. 74 - February 2016 – pdf can be accessed at: http://www.cfr.org/china/xi-jinping-global-stage/p37569?cid=otr-marketing_use-Xi_Jinping_CSR

Economic growth and nationalism have for decades been the two founts of legitimacy for the Communist Party, and as the former wanes, Xi will likely rely increasingly on the latter . Since 1989, the party has deliberately and

carefully laid the foundation for such a strategy through patriotic education, censorship, government-backed protests against Japan, and

relentless news and popular media that have reinforced a nationalist victimization narrative. As a powerful but exposed leader, Xi will tap into this

potent nationalist vein through foreign policy , burnishing his nationalist credentials and securing his domestic position from elite and popular criticism, all while pursuing various Chinese national interests. For example, an emphasis on territorial disputes and historical grievances could partially divert attention from the country's economic woes and arrest a potential decline in his public approval; in contrast, a visible setback or controversial concession

on such issues could undermine his standing with Chinese citizens and party elites. On economic matters, concerns over growth and

employment may lead China to become increasingly recalcitrant and self-interested. In the future, Xi could become more hostile to the West, using it as a foil to boost his approval ratings the way Putin has in Russia. Already, major Chinese newspapers

are running articles blaming the country's economic slump on efforts undertaken by insidious "foreign forces" that seek to sabotage the country's rise. Even if Xi does not seek more combative relations with the West, he will nonetheless find it difficult to negotiate publicly on a variety of issues, especially when nationalist sentiment runs high. On territorial matters, Xi will be unwilling or unable to make concessions that could harm his domestic position, and may even seek to escalate territorial disputes against Japan or S outh C hina S ea claimants as a way of redirecting domestic attention away from the economic situation and burnishing his nationalist record. A dangerous but unlikely possibility is that Xi may even be tempted to use military force to instigate limited conflicts against the Philippines, Vietnam, or Japan. Given that Japan is a prominent target of China's propaganda and media, and that memories of Japan's brutal occupation are still influential, ties between China and Japan may continue to worsen.

SCS conflict causes huge death tolls.Wittner ‘11

(Lawrence S. Wittner, Emeritus Professor of History at the State University of New York/Albany, Wittner is the author of eight books, the editor or co-editor of another four, and the author of over 250 published articles and book reviews. From 1984 to 1987, he edited Peace & Change, a journal of peace research., 11/28/2011, "Is a Nuclear War With China Possible?", www.huntingtonnews.net/14446)

While nuclear weapons exist , there remains a danger that they will be used . After all, for centuries national conflicts have led to wars, with nations employing their deadliest weapons . The current deterioration of U.S. relations with China might end up providing us with yet an other example of this phenomenon . The gathering tension between the U nited S tates and China is clear enough. Disturbed by China’s growing economic and

military strength, the U.S . government recently challenged China’s claims in the South China Sea , increased the U.S.

military presence in Australia, and deepened U.S. military ties with other nations in the Pacific region.

According to Secretary of State Hillary Clinton, the United States was “asserting our own position as a Pacific power.” But need this lead to nuclear war? Not necessarily. And yet, there are signs that it could . After all, both the United States and

China possess large numbers of nuclear weapons. The U.S. government threatened to attack China with nuclear weapons during the Korean War and, later, during the conflict over the future of China’s offshore islands, Quemoy and Matsu. In the midst of the latter confrontation, President Dwight Eisenhower declared publicly, and chillingly, that U.S. nuclear weapons would “be used just exactly as you would use a bullet or anything else.” Of course, China didn’t have nuclear weapons then. Now that it does, perhaps the behavior of national leaders will be more temperate. But the loose nuclear threats of U.S. and Soviet government officials during the Cold War, when both nations had vast nuclear arsenals, should convince us that, even as the military

ante is raised, nuclear saber-rattling persists. Some pundits argue that nuclear weapons prevent wars between nuclear-armed nations; and, admittedly, there haven’t been very many—at least not yet. But the Kargil War of 1999,

between nuclear-armed India and nuclear-armed Pakistan, should convince us that such wars can occur. Indeed, in that case, the conflict almost slipped into a nuclear war. Pakistan’s foreign secretary threatened that, if the war escalated, his country felt free to use “any weapon” in its arsenal. During the conflict, Pakistan did move nuclear weapons toward its border, while India, it

is claimed, readied its own nuclear missiles for an attack on Pakistan. At the least, though, don’t nuclear weapons deter a nuclear

attack? Do they? Obviously, NATO leaders didn’t feel deterred, for, throughout the Cold War , NATO’s strategy was to respond to a Soviet conventional military attack on Western Europe by launching a Western nuclear attack on the nuclear-armed Soviet Union. Furthermore, if U.S. government officials really believed that nuclear deterrence worked, they would not have resorted to championing “Star Wars” and

its modern variant, national missile defense. Why are these vastly expensive—and probably unworkable—military defense systems needed if other nuclear powers are deterred from attacking by U.S. nuclear might? Of course, the bottom line for those Americans convinced that nuclear weapons safeguard them from a Chinese nuclear attack might be that the U.S. nuclear arsenal is far greater than its Chinese counterpart. Today, it is estimated that the U.S. government possesses over five thousand nuclear warheads, while the Chinese government has a total inventory of roughly three hundred. Moreover, only about forty of these Chinese nuclear weapons can reach the United States. Surely the United States

would “win” any nuclear war with China. But what would that “victory” entail? A nuclear attack by China would immediately slaughter at least 10 million Americans in a great storm of blast and fire, while leaving many more dying horribly of sickness and

radiation poisoning. The Chinese death toll in a nuclear war would be far highe r . Both nations would be reduced to smoldering, radioactive wastelands. Also, radioactive debris sent aloft by the nuclear explosions would blot

out the sun and bring on a “nuclear winter” around the globe—destroying agriculture, creating worldwide famine, and generating chaos and destruction .

2AC vs. version 1.0 - CPlan and internal net benefit

1. Perm – do the cplan.

It doesn’t sever – adding more conditions is a textual addition to the plan. Cplans must be textually and functionally competitive – or else the worst consult cplans compete.

2. “Add a condition” cplans are a voter – they shatter engaging the 1AC, by allowing any condition to be tacked-on. History goes our way – the Neg’s theory brought us “add sea turtle protections” and “reverse conditions – do the plan unless Israel agrees to give up Palestine”. That kills in-depth debate and gives the neg stale generics.

3. Aff solves the turn – we immediately get US investors in. That changes inefficient SOEs. Delay is bad.

Paulson ‘13

Henry Paulson was formerly the U.S. Treasury secretary and now serves as the Chair of the Paulson Institute at the University of Chicago – “The Path to Double Happiness” – Wall Street Journal - June 4, 2013 - http://www.wsj.com/articles/SB10001424127887323469804578523144222235104

In addition to addressing these two key issues, promoting cross-border investment flows is also necessary. One vehicle for doing so, while advancing negotiations on market access and securing equal competitive conditions, is the Bilateral Investment Treaty, or BIT. Such a treaty would enhance investor protections for both sides. If China is to achieve its new economic model, it must introduce competition into its economy . In financial services, for

example, allowing foreign financial firms to compete equally will create more open and efficient capital markets

and help transition China to a nation of investors, not just savers. Beijing should also introduce more competition to help its own

private sector. Anticompetitive practices hurt Chinese private firms nearly as much as foreign ones. For all their subsidies , benefits and preferential access to credit available only to state-owned enterprises , it is private firms that are the major source of Chinese job creation . Weaning state-owned companies off subsidies will benefit them by making them more competitive . It also would ensure market rules for the private, small and medium-size businesses that

create most Chinese jobs, yet are largely excluded from state-backed loans and resource subsidies. Ultimately, both countries need capital to flow more freely: Americans because they need job-creating capital flows, including direct investment from China, and the Chinese because Beijing wants to invest more in the U.S. China complains about a lack of clarity in the U.S. regulatory framework. The U.S. could help address that concern by enacting more transparent investment policies,

which would lead to more Chinese investment in the U.S. This is a rare moment of opportunity for both

countries. We can continue to play defense, or we can play offense by using negotiations to make our economies more balanced. If we squander the moment, we will regret it.

4. It’s offense for us:

External pressure – like the cplan – will fail. Gaining better US access to the Chinese market – like the plan - solves best.GOODMAN & PARKER ‘15

Matthew P. Goodman is senior adviser for Asian economics and holds the William E. Simon Chair in Political Economy at CSIS. The Simon Chair examines current issues in international economic policy, with a focus on the Asia-Pacific region. Previously, he served as director for international economics on the National Security Council staff, working on the G-20, APEC, and other presidential summits. Before joining the White House, Goodman was senior adviser to the undersecretary for economic affairs at the U.S. Department of State. He has also worked at Albright Stonebridge Group, Goldman Sachs, and the U.S. Treasury Department. Goodman holds an M.A. from the Johns Hopkins School of Advanced International Studies and a B.Sc. from the London School of Economics. David A. Parker is a research associate with the Simon Chair in Political Economy at CSIS. He manages research projects on Northeast Asian states' economic policy and policymaking and U.S. economic strategy toward the Asia-Pacific region. His current research interest is in Chinese, Japanese, and American economic strategies in the Asia Pacific. “NAVIGATING CHOPPY WATERS” - A Report of the CSIS Simon Chair in Political Economy - MARCH 2015 – available via: https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0ahUKEwj06f2Ah9PNAhXE7D4KHeJ5AAQQFghOMAc&url=https%3A%2F%2Fcsis-prod.s3.amazonaws.com%2Fs3fs-public%2F150327_navigating_choppy_waters.pdf&usg=AFQjCNFnaJKFXAFDvzQW5r_Zgg184FBWwg&cad=rja

At the same time, it would be a mistake to simply write off the limited progress made so far on capital account liberalization as observers misreading Beijing's intentions en masse. The initial framing of the Shanghai experiment put finance front and center on the reform agenda along with administrative reform, and most observers agree that progress on the former has been disappointing. This frustration is not by design. To some degree, it is likely that China's leaders initially oversold the zone, and have since had to roll back their ambitions in light of the

difficulties so far encountered. For all Beijing's (real and perceived) penchant for planning, China's leaders are fallible, time-pressed individuals making policy in the context of incomplete information. Their extreme emphasis on maintaining stability makes them hyperaware of

the need to adapt policy to changing circumstances, even as their political culture makes public backpedaling difficult. POLICYMAKING PATTERNS As the above cases suggest, the Xi administration's approach to financial reform demonstrates both important aspects of continuity with earlier periods and its own distinct characteristics. Perhaps the most distinct characteristic of the Xi leadership's approach to financial reform is a decisive, centralized style of decisionmaking. When a specific, short-term problem is identified, a decisive deployment of specific countermeasures follows. In two of the three cases, this approach proved largely successful in achieving policy objectives. However, as the development of the Shanghai FTZ shows, when the goals of reform are less explicit, the reform requires implementation over a longer time frame, and there is a broader range of actors involved, achieving decisive outcomes has proven more challenging. This suggests that successful implementation in finance and other areas of reform will require the leadership to

employ strategies beyond those demonstrated in these case studies. In other ways, the approach of the Xi leadership has been in keeping with established patterns of Chinese economic policymaking. For example, achieving coordination between Chinese ministries clearly remains a major challenge, and one not easily solved by top leadership's sweeping policy pronouncements. While such pronouncements and the promise to "give the market a decisive role" have set the tone for policies to be implemented, achieving concrete outcomes and effective coordination will additionally require top leaders to take ownership of initiatives and supply the close supervision and clear directives needed to drive processes forward. Even if leaders do take a more hands-on approach, the Shanghai experience shows that there remain important capacity and mindset gaps for designing and implementing more market-based reforms (let alone administering the resulting system) at the local level. These will inevitably take time to address. Alternatively, leaders may attempt to sidestep coordination altogether, as they did in June 2013 and the first quarter of 2014, empowering one ministry to act decisively to achieve a narrow objective. However, this tactic is not universally applicable; some mechanism for achieving coordination will ultimately be necessary, and such a mechanism is not yet evident. For example, reports suggest the PBOC-led financial regulatory coordinating body established in August 2013

(following the June shock) has been hobbled by intermin-isterial conflict.149 This is the same problem that frustrated earlier attempts to establish such a regulatory coordinating mechanism, and more general attempts to achieve effective coordination between state agencies of equal formal rank. Coordination also clearly remains a challenge between the central and local governments: even in Shanghai, despite its leaders' close ties to Zhongnanhai and Xi's own experience as its party secretary, this has proven difficult. A continued preference for experimentation remains evident in financial reform, albeit of an unusually cautious and incremental kind. In the case of the Shanghai FTZ, this "incremental" approach is due at least in part to coordination challenges and other factors discussed earlier. However, it also likely reflects another characteristic of Chinese policymakers' tactics in financial reform more generally: a careful attention to sequencing, widely accepted as central to avoiding instability. This is evident in Beijing's approach to interest rate liberalization, where, among other reforms, deposit insurance has been stressed as an essential prerequisite to full liberalization. It is also the case in exchange rate and capital account reform, where the widening of the RMB trading band and the creation of the Hong Kong-Shanghai stock exchange connection, respectively, represent incremental advancements rather than dramatic leaps toward the eventual (stated) goal of full liberalization. As is evident in the Shanghai case, the current leadership is also drawing from the tried-and-true playbook of wielding external pressure to drive reform. However, the relatively lackluster

progress thus far serves as an important reminder that external pressure alone cannot drive reform ; it must be wielded. For example, China's WTO accession was closely overseen by the premier with direct investment in the process, guided and coordinated by the state councilor directly reporting to the premier, and coordinated by two major ministries in close cooperation with the State Council general office.150 No such approach to the BIT negotiations, or to financial reform, is so far evident, nor is an organizing principle as comprehensive as

the WTO accession process necessarily available. In contrast to external pressure, however, external forces ,

particularly from financial markets , clearly constrain the options available to Chinese policymakers and influence their policy choices, as demonstrated by June 2013 and the widening of the RMB trading band (as well as China's challenges in dealing with capital outflows in the first quarter of 2015).151

5. “high quality” is a code-word for “US demands China changes before offering concessions”. That stance will fail – that’s our 1AC Hu and Martina ev

6. QPQ’s and prior conditions fail to build US-Sino ties.Paulson & Rubin ‘15

Henry M. Paulson Jr. is the chair of the Paulson Institute at the University of Chicago and served as the secretary of the Treasury in the Bush administration (2006–09). Robert E. Rubin is a co-chair of the Council on Foreign Relations and served as the secretary of the Treasury in the Clinton administration (1995–99) – “Why the U.S. Needs to Listen to China” - The Atlantic - June 2015 - http://www.theatlantic.com/magazine/archive/2015/06/the-blame-trap/392081/

Discussions of the U.S.-China economic relationship too often begin with a recital of each country’s grievances

against the other. The usual litany of American criticisms includes China’s management of its exchange rate, subsidies that benefit state-owned enterprises, and barriers to American companies seeking to operate in China. Another prominent critique involves Chinese cyber-hacking of U.S. businesses’ intellectual property, and China’s failure to protect intellectual property more generally. For its part, China castigates the U.S. for its irresponsible fiscal trajectory, its political opposition to Chinese investment in American companies and infrastructure, and its export-control laws, especially those restricting the export of technologies with

potential military applications. We believe it’s time to turn the typical exchange of economic critiques on its head. The two countries have largely been engaged in a dialogue of the deaf, each blaming the other for its own failings, exerting pressure on the other to accede to its demands , and too often waiting for the other to act first. In fact, it is in each country’s self-interest to meaningfully address the criticisms made by the other.

7. Perm – do both – do the plan and also offer the cplan.

8. Chinese diversionary war will never happen. Levi & Economy ‘16

et al; Michael A. Levi and Elizabeth Economy are both Senior Fellows at the Council on Foreign Relations. The Council on Foreign Relations (CFR) is an independent, nonpartisan membership organization, think tank, and publisher. Michael Levi is the David M. Rubenstein senior fellow for energy and the environment at the Council on Foreign Relations (CFR), director of CFR’s Maurice R. Greenberg Center for Geoeconomic Studies, and director of the CFR program on energy security and climate change. He is an expert on energy, climate change, nuclear security, and the interplay of global economics and international politics. Before joining CFR, Dr. Levi was a nonresident science fellow and a science and technology fellow in foreign policy studies at the Brookings Institution. Prior to that, he was director of the Federation of American Scientists' Strategic Security Project. Elizabeth Economy is the C.V. Starr senior fellow and director for Asia studies at the Council on Foreign Relations. Dr. Economy has published widely on both Chinese domestic and foreign policy. Dr. Economy is a frequent guest on nationally broadcast television and radio programs, has testified before Congress on numerous occasions, and regularly consults for U.S. government agencies and companies. Levi & Economy hosted a workshop along with the Council on Foreign Relations' Maurice R. Greenberg Center for Geoeconomic Studies and Asia Studies program. This report is includes the thoughts of the CFR participants at the workshop – “Economic and Geopolitical Fallout From China's Slowing Growth” - February 25,2016 – pdf available via: http://www.cfr.org/china/economic-geopolitical-fallout-chinas-slowing-growth/p37554

But Beijing Is Unlikely to Wage War if the Economy Crashes By the same token, analysts should probably discard the notion that a crash of the domestic economy would provoke a Chinese military adventure abroad in order to distract Chinese people from upheaval at home. This "wag the dog” scenario may gain currency with screenplay writers and conspiracy buffs, but it is not borne out by history. Although it is true that

strife-torn countries often get embroiled in external wars , it is rarely because their leaders set out to generate a diversionary activity for the ir restive populace. Indeed, most workshop participants argued that if China were beset by

an acute internal crisis, the Communist Party would almost certainly refocus its energy and resources inward. The leadership and its security apparatus, including components of the military, would have their hands full protecting against social instability, tamping down the activities of Uighur and Tibetan separatists, and maintaining the cohesiveness of the party itself. To launch a foreign war in an atmosphere of domestic public grievance would be particularly dangerous for Beijing. If China sustained a defeat at the hands of the Japanese or U.S. navy, the leadership would compound its reputation for economic mismanagement with one for military ineptitude—a potentially lethal cocktail for the ruling party.

9. Empirically false – growth rates have been slowing, and the impacts haven’t happened. And, there have been tensions in the SCS and ECS without any escalation.

Backlines for the Neg to draw upon

Backlines - Cplan solves

China will give-in to US demands. Xi now desires a rapid conclusion to BIT talks.

Global Times ‘16

Internally quoting Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation - “Xi urges earlier BIT signing with the US” - Global Times – June 7th - http://english.sina.com/china/p/2016-06-07/doc-ifxsvenx3484688.shtml

President Xi Jinping on Monday called for efforts toward a swifter realization of a China-US bilateral investment

treaty ( BIT ) that is mutually beneficial. Xi made the remarks at the joint opening ceremony of the eighth China-US Strategic and Economic Dialogue (S&ED) and the seventh China-US High-Level Consultation on People-to-People Exchanges in Beijing. Chinese Vice Premier Wang Yang said on Monday that China will submit next week its proposed "negative list" of sectors that would remain off-limits to US investments in a US-China BIT. A total of 24 rounds of BIT talks have been held since negotiations began in 2008. US Treasury Secretary Jack Lew said he looks forward to seeing the new negative list when US and Chinese BIT negotiators meet next week in Washington. Before attending the S&ED, Lew visited Tsinghua University over the weekend, telling students that the US is waiting for China's negative list and constructive outcome from BIT talks before the end of President Barack Obama's term. Experts said a BIT is very important for both China and the US, but negotiations require more time due to the treaty's complexity and status as the most important agreement between the two countries. "As the BIT heralds bilateral investment treaties globally, its details require very serious discussions between the two sides. A BIT between China and the US will almost certainly become a model for later treaties with other economies, adding to its significance," Chen Fengying, a research

fellow at the China Institutes of Contemporary International Relations, told the Global Times Monday. The treaty will initially benefit bilateral investments, then enhance trade, and will further deepen communication and exchanges in other sectors, Chen noted. In 2015, trade between China and the US reached 558.4 billion yuan ($85 billion), growing 0.6 percent year-on-year, according to data published by the

Ministry of Commerce in January. China surpassed Canada as the US' largest trading partner, while the US is China's second-largest trading partner. Racing with time This year's S&ED is the last one under the Obama administration, on which analysts and business groups pin their hopes, expecting substantial progress in negotiations. Zhang Ning, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Monday that the best outcome would be the US Congress approving the treaty before the end of Obama's term. "But whether Congress approves it remains uncertain," Zhang said, noting that striking a deal will help China on its path to becoming a more market-

oriented economy. Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said there is a possibility that significant progress would be made toward the signing of the treaty. "Most of the concerns from the two sides are not new ones. We are at the compromising stage ," Bai said, adding that the US

is too sensitive toward some of the Chinese investments. The US' status as the world's largest economy makes it an ideal destination for Chinese investments, Bai said.

Holding out solves – US leverage only grows as China’s trade deficit grows. Lam ‘15

Tina Lam is an Associate at Ferguson, Frost, Moore & Young, LLP. “THE LEGAL HURDLES PREVENTING A U.S.-CHINA BILATERAL INVESTMENT TREATY: PROBLEMS WITH NATIONAL SECURITY, ENVIRONMENTAL AND LABOR STANDARDS, AND INVESTOR-STATE DISPUTE SETTLEMENT MECHANISMS” - Florida Coastal Law Review - Spring, 2015 – available via: lexis; lawrev

However, once the balance of China's outward FDI outweighs the inward FDIC, China will have more incentives to ensure that there is [*344] a BIT between the two nations. n321 Moreover, if the current trend in

China's BIT policy of liberalization or "Americanization" continues, then the probability of success for future U.S.-China BIT negotiations will increase. n322 A U.S.-China BIT can act as a guideline to reduce the tension between the two nations and help liberalize the investment policies in both countries. n323 Therefore, a successful U.S.-China BIT is unlikely to result

from the fifth S&ED, but the current trends in American and Chinese BIT policies suggest that a successful U.S.-China BIT is more likely to result from future BIT negotiations, perhaps at a sixth S&ED.

(Note: FDI = “Foreign Direct Investment” and the acronym “FDIC” – in this context – means “foreign direct investment per capita”)

Our QPQ solves – China will agree to swap a shorter negative lists for better US transparency. Li ‘16

et al; Li Qiaoyi is a reporter with the Global Times that writes for the newspaper’s Opinion Pages. Internally quoting Chen Deming, president of the Association for Relations Across the Taiwan Straits - “China-US investment treaty talks near last stage “ – Global Times – March 24th - http://www.globaltimes.cn/content/975689.shtml

China hopes to achieve substantial results from negotiations with the US over a Bilateral Investment Treaty (BIT)

before August, but it is still hard for both sides to reach a consensus on the negative list issue, a former minister of

commerce said on Wednesday. "After years of negotiations, most of the core issues have been resolved , and the negative list is the only thing left to be settled, " Chen Deming said on the sidelines of the Boao Forum for Asia (BFA) on Wednesday. But what

concerns Chen the most is the two sides may miss the chance of reaching an agreement before the US presidential elections enter the final phase later this year, as

new uncertainties will surface. He also noted that a gap remains between the requirements of the two countries on the negative list, and both sides need to compromise on this. Since China and the US started the BIT negotiations in 2008, there have been 24 rounds of talks. In 2013, the two sides reached a

major breakthrough when they began discussing each other's negative list, which identifies all the areas that are not open to investors. Just last week, Premier Li

Keqiang said at a news conference after the conclusion of the annual legislative session in Beijing that the two sides are making efforts to speed up the BIT talks and that China will gradually increase market access for US investors , adding that the process should be mutual. "The US should also be more open to China, not only in terms of market access, but also in the review aspect where more transparency is needed," Chen, who is currently president of the Association for Relations Across the Taiwan Straits, said at a BFA panel discussion on Wednesday. China became the US' largest trading partner in 2015 with bilateral trade reaching $560 billion, so a treaty

between the two countries would have a major impact on the world economy, according to Chen. He also noted that China and the US have already reached a high-standard foreign investment agreement on the BIT , though negotiations remain.

Cplan gets China to say “yes” – they’ll reduce protections for SOEs because they’ve done so for other nations.

Princeton Task Force ‘13

A report prepared by the Princeton Task Force on Chinese Investment in the United States, a Junior Policy Task Force in the Woodrow Wilson School of Public and International Affairs at Princeton University. Designed and produced by Thomas Tasche and Alianna Chen Woodrow Wilson School of Public and International Affairs, Princeton University. This paper was overseen by

Professor Sophie Meunier – who is a Research Scholar and Lecturer in Public and International Affairs at Princeton. “Responding to Chinese Direct Investment in the United States” - December 6, 2013 - http://scholar.princeton.edu/sites/default/files/smeunier/files/Owned%20by%20China%20Class%20Report.pdf

6. Work toward a BIT with China based on America's model BIT and China's RECENT INVESTMENT AGREEMENTS American negotiators should employ the American Model BIT as a framework for determining the ultimate structure of the U.S. China BIT. To do otherwise would set a dangerous precedent for future negotiations because the American Model BIT has proven successful in protecting investors. In order to determine what deviations from the Model are necessary, American negotiators should reference China's recent BITs and free trade agreements (FTAs) with developed countries. China has signed BITs that confer substantial protections to investors, including its BITs with Germany in 2003 and Canada in 2012. Additionally, the investment chapter of its 2008 FTA with New Zealand provides liberal protections of investors. These agreements contain clauses that will be useful in determining what China can be expected to concede on issues such as national treatment, pre-establishment rights, and performance requirements. Any attempt to demand concessions that far exceed the provisions contained in these agreements is likely to jeopardize the conclusion of a BIT.

Backlines – Uniqueness

US negotiators will hold out for a high-quality BIT in the status quo.

Froman ‘15

Michael Froman - U.S. Trade Representative since 2013. He has been Assistant to the President of the United States and Deputy National Security Advisor for International Economic Affairs, a position held jointly at the National Security Council and the National Economic Council. Remarks as delivered at the CSIS Asian Architecture Conference - September 22, 2015 - https://ustr.gov/about-us/policy-offices/press-office/speechestranscripts/2015/september/remarks-ambassador-michael

Our Bilateral Investment Treaty, or BIT, negotiations are one area offering a major avenue to engage on China’s domestic reform efforts,

to pursue greater market access , a more level playing field , and a substantially improved investment environment for investment. The BIT provides an important opportunity for China to send a clear and positive signal, to reaffirm its

commitment to reform and to help strengthen confidence in China’s market and investment environment . In order to conclude the BIT , it’s going to need to be a high-standard agreement. The two sides will need to reach agreement on

a text that addresses critical concerns about China’s investment environment and on a negative list that is limited, narrow, and represents a substantial liberalization of the Chinese economy . Now, let me be clear , over the past 20

months, we’ve made important progress in these negotiations. China’s revised negative list is better than

its original, and certainly represents serious effort by senior Chinese leaders. Still, we are a substantial distance from the kind of high standard agreement necessary to achieve our mutual objectives. China must also demonstrate that it is prepared to support market openings under the BIT with a domestic legal and policy regime that provides for an attractive investment environment so that what is given with one hand is not simply taken back with the other. We look to President Xi’s visit and our other upcoming engagements with China to send a clear signal about its commitment to reform through the BIT negotiations.

US is pushing for a high-quality BIT nowSophos ‘16

Zoe Sophos is a Business Advisory Services manager at the US-China Business Council. The US-China Business Council (USCBC) is a private, nonpartisan, nonprofit organization of more than 200 American companies that do business with China. Founded in 1973, USCBC has provided unmatched information, advisory, advocacy, and program services to its membership for more than four decades. Through its offices in Washington, DC, Beijing, and Shanghai, USCBC is uniquely positioned to serve its members' interests in the United States and China China-Business Review – June 1st, 2016 - http://www.chinabusinessreview.com/sed-to-prioritize-investment-transparency-economic-restructuring/

USCBC has learned from discussions with US government officials that the economic track of this year's S&ED will highlight investment openings

and transparency—two of USCBC's top priorities. US negotiators are pushing for broad investment liberalizations for

foreign firms, particularly across services, manufacturing, agricultural, and extractive industries. Negotiators want to ensure that investment openings are not negated by China's increasing use of national security as the justification for a variety of

restrictive measures. A high-standard US-China Bilateral Investment Treaty ( BIT ) is a top priority for USCBC and the

Obama administration as the best way to eliminate market access restrictions that US companies face in China. Previous S&EDs have been important forums for progress on the BIT, including China's agreement at the 2013 S&ED to use a negative list for foreign investment for the first time. China missed a self-declared deadline to propose a revised negative list offer in March, and high-

level US government leadership continues to press China for a high-quality negative list offer.

The US won’t deviate from its Model BIT stance in the quo – doing so would complicate other BIT negotiations.Kong ‘10

Kong Qingjiang is Professor of Law of Zhejiang Gongshang University, China. “US-CHINA BILATERAL INVESTMENT TREATY NEGOTIATIONS” – February 25th, 2010 http://www.eai.nus.edu.sg/publications/files/BB507.pdf

The US attached great importance to the BIT negotiations with China. Traditionally, the Department of State, as well as the Office of US Trade Representative, is involved in the negotiation of a BIT. When it comes to the negotiation of the US-China BIT, the US Negotiation Team has been expanded to include representatives from the US Department of State, Department of Treasury, Department of Commerce, and Office of the US Trade Representative. In contrast, on the Chinese side, the negotiation of the BIT is primarily within the purview of the Ministry of Commerce, the agency responsible for foreign trade and investment. The BITs negotiated by the United States aimed to come to an agreement on non-discriminatory treatment; fair and equitable treatment, including the right to due process; compensation in the event of expropriation or nationalization; free transfers of capital; transparent regulation; and submission of disputes to independent

international arbitration. The thrust of the US position is a high standard BIT . A BIT based on the US model will be able to

address most, if not all, of the US concerns. US companies also fear that any deviation from the “high standard” BITs that US negotiators have insisted on negotiating with other countries earlier on would complicate future negotiations with

desired BIT candidates such as Russia, Brazil and India. That is why the US side has insisted on the US model BIT. The US has made clear its position: “The United States will negotiate on the basis of the US model BIT, which reflects high standards of investor protection.”

Backlines – BIT inevitable now – for the disad version.

A Bit is inevitable – holding out will solve.Lam ‘15

Tina Lam is an Associate at Ferguson, Frost, Moore & Young, LLP. “THE LEGAL HURDLES PREVENTING A U.S.-CHINA BILATERAL INVESTMENT TREATY: PROBLEMS WITH NATIONAL SECURITY, ENVIRONMENTAL AND LABOR STANDARDS, AND INVESTOR-STATE DISPUTE SETTLEMENT MECHANISMS” - Florida Coastal Law Review - Spring, 2015 – available via: lexis; lawrev

However, once the balance of China's outward FDI outweighs the inward FDIC, China will have more incentives to ensure that there is [*344] a BIT between the two nations. n321 Moreover, if the current trend in China's BIT policy of liberalization or "Americanization" continues, then the probability of success for future U.S.-China BIT negotiations will increase. n322 A U.S.-China BIT can act as a guideline to reduce the tension between the two nations and help liberalize the investment policies in both countries. n323 Therefore, a successful U.S.-China BIT is unlikely to result

from the fifth S&ED, but the current trends in American and Chinese BIT policies suggest that a successful U.S.-China BIT is more likely to result from future BIT negotiations, perhaps at a sixth S&ED.

(Note: FDI = “Foreign Direct Investment” and the acronym “FDIC” – in this context – means “foreign direct investment per capita”)

US-Sino BIT is inevitable – China increasingly accedes to US negotiating positions.Congyan ‘ 9

Cai Congyan is a professor of public international law and international investment law at Xiamen University School of Law. “China--US BIT Negotiations and the Future of Investment Treaty Regime: A Grand Bilateral Bargain with Multilateral Implications”- Journal of International Economic Law 12(2):457-506 – June – available at: https://www.researchgate.net/publication/46511355_China--US_BIT_Negotiations_and_the_Future_of_Investment_Treaty_Regime_A_Grand_Bilateral_Bargain_with_Multilateral_Implications

China and the United States declared to launch the Bilateral Investment Treaty (BIT) negotiations at the conclusion of

the fourth China--US Strategic Economic Dialogue (SED) on June 18, 2008. This BIT negotiation revives a failed BIT program of

20 years ago . It can be expected that China--US BIT negotiations will be concluded successfully because China's approach to investment treaties has recently been Americanized to large degree and because China--US SED can also provide institutional support. Nevertheless, China should seriously evaluate what it will benefit from and will lose from this BIT program from multiple angles, not limited to investment regime only. What is more important, at the historical moment when structural deficiencies have made the investment treaty regime at a crossroad, China and the United States as great powers have a mandate to enhance to reconstruct and make it more balanced, responsive, and accountable through their BIT program. For this purpose, three fundamental dimensions of Special and Differentiated (S&D) treatment, conduct of investors, and sustainable development should be deliberately addressed. Oxford University Press 2009, all rights reserved, Oxford University Press.

https://www.researchgate.net/publication/46511355_China--US_BIT_Negotiations_and_the_Future_of_Investment_Treaty_Regime_A_Grand_Bilateral_Bargain_with_Multilateral_Implications



Bilateral Investment Treaty’s inevitable in the status quo. Tiezzi ‘16Shannon Tiezzi is Editor at The Diplomat. Shannon’s main focus is on China, and Shannon writes on China’s foreign relations, domestic politics, and economy. Shannon previously served as a research associate at the U.S.-China Policy Foundation and received an A.M. from Harvard University and a B.A. from The College of William and Mary. Shannon has also studied at Tsinghua University in Beijing. “Are China and the US Close to Sealing an Investment Treaty?” – The Diplomat – March 24nd - http://thediplomat.com/2016/03/are-china-and-the-us-close-to-sealing-an-investment-treaty/

China and the United States are almost finished with negotiations over a key investment treaty, former Chinese Commerce Minister Chen Deming said on Wednesday. If successfully concluded, the bilateral investment treaty

( BIT ) could substantially increase Chinese and U.S. investments in each other’s markets. A BIT between China and the United States has been in the works for eight years . In 2013, the two sides announced that they were finally

ready to enter “substantive BIT negotiations” after nine rounds of talks on technical issues. Now, according to Chen , the two sides are almost finished. Xinhua cited the former commerce minister, who was speaking at the Boao Forum for Asia, as saying that most of the key issues in BIT negotiations have been resolved. Chen mentioned that both sides have agreed, for example, to handle disputes between

the host country and investors via third-party arbitration at the World Bank.

Backlines - Links to SOEs

Plan rushes to conclude a BIT – this softens provisions that crack-down on Chinese SOEs.Cimino-Isaacs ‘15

Cathleen Cimino-Isaacs, research associate, has been with the Peterson Institute since August 2012. She works on economic issues relating to international trade policy, free trade agreement negotiations, and the future of the World Trade Organization. Cimino-Isaacs obtained her master’s degree in international affairs with a focus on international economics from the School of International Relations and Pacific Studies (IR/PS) at the University of California, San Diego. She earned a Bachelor of Arts degree in East Asian studies and political science from Columbia University. “US BIT Talks with China and India: A Recap” - PIIE Website - September 30, 2015 - https://piie.com/blogs/trade-investment-policy-watch/us-bit-talks-china-and-india-recap

The United States has 41 BITs in force, the majority with developing countries (link is external).1 In 2012, the

revised model BIT (link is external) was released , renewing expectations for US BIT negotiations. The new requirements primarily related to stronger transparency, labor, and environment commitments, clarified treatment of state-owned

enterprises, and stricter limits on technology transfer (see Schott and Cimino 2014). These features in particular complicate discussions with major emerging markets, like China and India. And in part, they help explain why the United States has pursued few BITs in recent years—only two in the past decade—opting instead to negotiate investment obligations within its FTAs, the comprehensive nature of which allows for balancing concessions and tradeoffs with other parts of the agreement.2 There is a compelling case for greater integration between US-China and US-India via a comprehensive trade and investment agreement, whether bilaterally or regionally (for example, see Bergsten, Hufbauer, and Miner 2014 and Bergsten 2015). But this cooperation undoubtedly has a longer term outlook. Successfully negotiating the BITs

with China and India would serve as a stepping stone towards this end. China has more than 100 BITs, most recently concluding a

trilateral investment treaty with Japan and Korea and a BIT with Canada. These BITs somewhat upgrade Chinese past practices; still, Chinese BITs retain flexibility for investment restrictions through carve-outs and “nonconforming” measures. A BIT with the U nited S tates would seek to narrow these exceptions and broaden investment protections . Central to US concerns in the talks is securing pre-establishment rights for firms seeking to invest in China, market disciplines on state-owned enterprises , restraints on forced technology transfer, and stronger intellectual property (IP) protection. Central to Chinese concerns are restrictions on US high-technology exports, the widespread US practice of antidumping and countervailing duties, and the alleged bias in reviews by the Committee on Foreign Investment in the United States on proposed Chinese investments in the US (see Schott and Miner

2015 and Moran 2015). The 21st round of US-China BIT negotiations was held in early September 2015. The latest round has

focused on finalizing the negative list offers, with the expectation that the list is narrow and excludes few sectors from liberalization. China’s revised list was welcomed by US Trade Representative Michael Froman for improving upon the original offer, but in practice, it fell short of significant market opening —and as a result, Froman concluded (link is external) there remains “a substantial distance from the kind of high standard agreement necessary to achieve our mutual objectives.”3 Hence despite the politically-timed release of the revised offer, expectations were dampened for a major BIT announcement coming out of the Xi-Obama meetings. Indeed the joint statement (link is external) only affirmed incremental progress: “[I]n light of the progress made in the BIT negotiations and both sides’ improved negative list proposals in September, the United States and China commit to intensify the negotiations and to work expeditiously to conclude the negotiation of a mutually beneficial treaty that meets these high standards.” India has concluded 82 BITs, including with EU member states, ASEAN, and Japan. India’s BIT negotiations—including with the United States—were put on hold in early 2013 as India conducted an internal review of its model BIT. An update of its 1993 template was widely welcomed. However, the draft released in March 2015 (link is external) for public comment hardly serves as a constructive baseline for moving forward with the US talks, as several serious gaps remain, not just with the US standard, but with common BIT practice more generally.4 Notable among these is an extremely narrow definition of investment as an “enterprise” in the host state with “real and substantial business operations” in India, which excludes, among other things, portfolio investment, intangible assets, and importantly, intellectual property rights. In addition, India’s model BIT excludes the most favored nation provision and pre-establishment treatment for foreign investors, has weaker environment and labor obligations, and places limits on recourse

to investor-state dispute settlement (ISDS). The US-India BIT talks began in 2009 but soon stalled. In January 2015, Presidents Obama and Modi reaffirmed (link is external) their commitment to make progress and effectively sanctioned resuming the talks. But positive rhetoric will not be enough to bridge the wide gap that remains between the two countries' approaches to standards, as evident from India’s draft model BIT.5 Major US concerns in the BIT talks also include India’s use of local content requirements, forced technology transfer, and level of IP protection. Moreover, a number of Indian sectors of interest remain partially restricted to FDI, including civil aviation, banking and insurance, broadcasting, and depositories. For the Indian side, major concerns include differences relating to environment and labor standards and approaches to ISDS.6 Top priorities for India are provisions on FDI in services and visa reform that would facilitate the movement of Indian skilled workers to the US. The United States and India held bilateral discussions on progress toward a BIT in March 2015. In practice, formal negotiations cannot resume until India finalizes its BIT review—no hard timeline has been set. Thus the US-India S&CD was not expected to produce concrete progress toward the BIT; indeed, the joint statement (link is external) made no mention of the talks, reflecting the reality that near-term prospects are dim. An economic cooperation factsheet (link is external) issued by the United States referred only to plans “to continue discussions to assess

the prospects for a high standard BIT.” The US talks with China and India have been difficult, but negotiators are well aware that BITs with such important commercial and strategic partners need a high quality outcome and should not be rushed for political expediency.

The plan’s concessionary approach lowers the quality of a Model BIT. This helps Chinese SOEs

Dayen ‘16

David Dayen is the winner of the Ida and Studs Terkel Prize for his book Chain of Title: How Three Ordinary Americans Uncovered Wall Street's Great Foreclosure Fraud. David is also a contributing writer to Salon.com and The Intercept, and a weekly columnist for The New Republic and The Fiscal Times – “The Job-Killing Trade Deal You’ve Never Heard Of: The China Bilateral Investment Treaty” – The American Prospect - March 18, 2016 - http://prospect.org/article/job-killing-trade-deal-you%E2%80%99ve-never-heard-china-bilateral-investment-treaty

On the flip side, there’s already substantial Chinese investment in the U.S.—more than U.S. investment in China, in fact—but we don’t have

good information on its impact. Many Chinese companies are state-owned or state-influenced, subsidized from home, and freed from having to run an immediate profit. Michael Wessel, a commissioner on the U.S.-China Economic and Security Review Commission, warns that Chinese-subsidized firms could squeeze domestic competitors by undercutting them on price. Despite this uncertainty, Wessel contends that not single case study on Chinese-invested firms has been undertaken by an independent expert. “We have no idea what Chinese

companies are doing in the U.S.,” he says. “Not all investment has [the] same impact. Our negotiators are flying blind.” When you contemplate Chinese state-owned enterprises enjoying the same treatment on their investments as domestic producers, and having the ability to use ISDS to maintain those privileges, things get even more alarming. “ISDS puts corporations and sovereign governments on the same plane,” says the AFL-CIO's Drake. “This would be China acting through a corporation to challenge a U.S. law.” Under ISDS, Chinese companies could sue federal, state, or local governments over any laws that force them to alter their production facilities. They could potentially sue the Committee on Foreign Investment in the United States (CFIUS), which approves all

foreign investment transactions, even though this panel’s reviews are normally not subject to judicial oversight. The U.S. could try to restrict state-owned enterprises, but without broadly-written language, Chinese companies would be likely to circumvent such

constraints. “We’ve talked to U.S. negotiators, they don’t seem disturbed by it,” Drake adds. “I’m disturbed that they’re not disturbed.” While most of these agreements look similar to the “model BIT,” a template treaty available at the State Department website, the administration has been strangely silent when it comes to its China trade negotiations. Administration officials haven’t publicly announced any negotiation sessions, nor have they briefed cleared trade advisers, who are supposed to be able to look at trade deals as they happen. “This is more secretive than the TPP,” says Wessel, who is also a cleared adviser.

Backlines - High-quality BIT = key to Chinese Econ

Chinese economy will collapse now – high-quality BIT is vital. It’s try-or-die for the turn.

Zimmerman ‘16

Jason Zimmerman is the chair of the American Chamber of Commerce in the People's Republic of China– “Stalled Chinese Reforms, Stalled Chinese Economy” - Wall Street Journal - April 13, 2016 - http://www.wsj.com/articles/stalled-chinese-reforms-stalled-chinese-economy-1460566422

But the American Chamber of Commerce in China has witnessed another trend emerging over the past few years. China has been building walls and

turning away from international norms. This can be seen when foreign nongovernmental organizations are blindsided by draft laws that

threaten their ability to operate in China. It can be seen in restrictions that defy the World Trade Organization by limiting the direct delivery of cloud services by foreign-invested enterprises. And it can be seen in the medical-device and pharmaceutical industries, where innovative and life-saving products have difficulty reaching Chinese consumers due to standards that are sometimes not based in science. International businesses have been patient, waiting for China to reform and enter the global business community as an equal and engaged player. But AmCham China members are

growing weary. A recent member survey shows 37% are "pessimistic" or "slightly pessimistic" about the next two years' regulatory outlook. China has gotten this far with great support from the international community. Its membership in the WTO, for example, has generated

immense dividends. Hong Kong and mainland China now rank as the No. 2 and No. 3 recipients of foreign direct investment. As the No. 1-ranked recipient of FDI, the U.S. knows the value of engagement through investment. It also understands that investment is not just about money, but also technology and innovation. In China, all of these will be important for the stable growth Mr. Li promises. We hope China's disconnect can be corrected to help it achieve its reform and development goals. We see three areas in

particular where direct and immediate attention is needed. The most pressing is fairness and transparency. While the rule of law has been a top concern for American businesses and China's own policy plenums for several years, this year marks the first time inconsistent and unclear rules have topped AmCham China members' concerns. The difficulty in obtaining business licenses is also of high concern. Licensing should be a simple procedure, but in China it's a major discriminatory barrier to doing business. Economies benefit from competition and transparent enforcement of regulations. China should

embrace more open policies for receiving input on draft laws and procuring business licenses. China's restrictive stance toward investment

also deserves more attention. The Brookings Institution describes China's investment environment as the strictest among the G-20 . How can the country weather an economic slowdown without support from other nations? Foreign direct investment into the

U.S. expands annually at a brisk pace, having risen 30% in 2015, but U.S. investment into China has stagnated and represents just 1% of all

U.S. direct investments abroad. U.S. companies in China are drawing back on their investment plans, and this year's decrease

is even greater than in 2009, when the world was mired in a financial crisis. In the present climate , China's own roadblocks impede further investment in areas such as services, which could contribute most to economic growth. Nonetheless, China

remains a top-three investment priority for most U.S. companies. And Americans are willing to work on this relationship, as demonstrated by negotiations on a U.S.-

China Bilateral Investment Treaty, a process that began in 2008. The U.S.-China BIT would likely be China's largest market-liberalization exercise since China's accession to the WTO in 2001. While the basic language has been agreed upon, there are several issues unique to China, such as the role of state-owned enterprises , data localization and intellectual

property protections, that need to be addressed. The "negative list" of exceptions must also be kept to a minimum for the treaty to be worthwhile. But the benefits in terms of improving the transparency and fairness of the regulatory environment that a high-quality agreement could bring are immense.

Continued State-protection of SOEs hurts the Chinese economy.

Blackwill & Campbell ‘16


After the 2008 global financial crisis, China began to cope with these vulnerabilities using a mixture of cheap lending and massive infrastructure investment. For a time, this investment-heavy approach was able to return China to high growth, but it was not sustainable. Investment now accounts for roughly half of Chinese growth, an unprecedentedly high amount, and it is subject to diminishing returns, with one dollar of investment producing 40 percent less GDP growth today than it did a decade

ago.20 Meanwhile, the loans that underwrite these unproductive investments—such as China's famed ghost cities, which

are filled with buildings but lacking in tenants or businesses—threaten the country's banking system and have pushed debt to

280 percent of GDP, according to a recent estimate from McKinsey & Company.21 A significant portion of these loans, and by some accounts a majority, have been disbursed to inefficient state-owned enterprises (SOEs ) rather than to productive private-sector companies, which in any case face higher interest rates than state companies. If these loans to SOEs are not paid back, they will threaten the banking system and the overall economy . 22 Growth having slowed every year since 2010, the party is under pressure to continue rebalancing the economy away from exports and investment and toward consumption, and to do so without systemic disruption.

ECS Impact Nationalist spats over the ECS will escalate - death tolls would be enormous.Baker ‘12

(Kevin R., Member of the Compensation Committee of Calfrac, Chair of the Corporate Governance and Nominating Committee, served as President and Chief Executive Officer of Century Oilfield Services Inc. from August 2005 until November 10, 2009, when it was acquired by the Corporation. He also has served as the President of Baycor Capital Inc., 9/17/2012, “What Would Happen if China and Japan Went to War?”, http://appreviews4u.com/2012/09/17/what-would-happen-if-china-and-japan-went-to-war/)

China is not an isolationist country but it is quite nationalistic . Their allies include, Russia , which is a big super power, Pakistan and Iran as well as North Korea . They have more allies than Japan, although most relations have

been built on economic strategies, being a money-centric nation. Countries potentially hostile toward China in the event of a Japan vs. China war include Germany, Britain, Australia and South Korea . So even though Japan does not

outwardly build relationships with allies, Japan would have allies rallying around them if China were to attack Japan .

The island dispute would not play out as it did in the UK vs. Argentina island dispute, as both sides could cause massive damage to each other, whereas the UK was far superior in firepower compared to Argentina. Conclusion Even though China outweighs Japan in numbers, the likelihood that a war would develop into a nuclear war means that numbers don’t really mean anything anymore . The nuclear capabilities of Japan and China would mean that each country could destroy each other many times over. The island dispute would then escalate to possible mass extinction for the human race . The nuclear fall out would affect most of Asia and to a certain extent the West. If the allies were then to turn on each other it would spell the end of the human race . Bear in mind that it will take an estimated 10,000 years for Chernobyl to become safe to walk

around and you’ll get an idea of what state land masses will be in after a war of such magnitude. I say ‘land masses’ as countries and nations would cease to exist then and it would be a case of ‘if’ and ‘where’ could human beings, plant life and animals could exist, if at all possible, which is very doubtful . Even with underground bunkers, just how long could people survive down there? With plant and animal life eradicated above? I would say maybe 20 years at best, if there are ample supplies of course.

A-to “Empirically False – Chinese Econ has declined in the past”

Prior economic declines hasn’t undermined Xi to the point of playing the nationalism card. The next one will Blackwill & Campbell ‘16


The real risk to China's economy, and to Xi's fortunes, comes not from the stock market's raw economic impact but from the damage done to

the government's credibility. Xi's strongman image suffered in the wake of the market collapse. His government had vocally encouraged average Chinese citizens to enter the country's stock market under the premise that good returns would incentivize higher spending, and was embarrassed when those investors were singed by the crash.24 The government then publicly staked its credibility on a commitment to arrest the stock market decline, but its ill-conceived market manipulations and hasty currency devaluations were of limited

effectiveness. Eventually, China was able to reverse the declines, but similar or repeated episodes will undermine the party's legitimacy. Aside from the perceptual costs posed by such economic downturns, Xi faces the considerable risk that a prolonged slowdown will directly affect the welfare of the average Chinese citizen. The possibility of a hard landing looms, and an economic wreck or a serious financial crisis could produce years of prolonged stagnation and slow growth that could shake the party to its core. Even absent such a disaster, if growth continues to slow, it will worsen a number of internal trends. The labor market already struggles to absorb the eight million college graduates China's universities produce each year. Blue-collar wages that had risen for a decade have been stagnant for well over a year as layoffs continue in coastal factories, with labor disputes doubling in 2014 and again in 2015.25 Chinese companies also face challenges, as corporate debt grows to 160 percent of China's GDP, up from 98 percent in 2008 and more than twice the current U.S. level of 70 percent. The fragile recovery in the country's property market could face a reversal that would undercut what is the biggest store of household

wealth for Chinese families. These problems could intertwine with the psychic impact of another stock market swing or economic crisis, which could further erode consumer confidence and jeopardize China's economic reorientation.26 Business and investor trust have similarly been hit, largely because the government's panicked attempts to control the market signaled the hesitancy of its commitment to reform. If the government's reputation is diminished and economic growth remains stagnant, then the leadership will grow increasingly worried about social unrest. Past economic crises contributed to outbreaks of mass protests, including those in 19 86 and 1989 that brought down two Chinese leaders, Hu Yaobang and Zhao Ziyang, and led to the violence in

Tiananmen Square. Although the party weathered the stock market slumps reasonably well, there is no guarantee it will be so fortunate in a future crisis.

If you want to make Chinese Econ Growth Bad (SOEs Bad) a net benefit

A Low-quality BIT protects Chinese SOEs. That gives a huge boost to the CPC’s international agenda.

Gneiting ‘13

Kelly Gneiting – author at Huffington Post and other media outlets – Independent American Party – “Oppose the U.S.-China Bilateral Investment Treaty” - September 19, 2013 - http://www.independentamericanparty.org/2013/09/oppose-the-u-s-china-bilateral-investment-treaty/

Although the politics for a BIT may not be optimal at this time, the time for opponents to act is now while the negotiations are just beginning, and while there is still enough time to inform the electorate about the negative consequences of a Sino-U.S. BIT. According to China Daily, the state-owned Chinese Communist newspaper, on July 13, “the US pledged to treat Chinese investment equally and fairly and to welcome investment from China, including that from State-owned enterprises.” The term “State-owned enterprises” is a misnomer and should be treated as such, considering that nothing is truly owned by just the “state” in the People’s Republic of China (PRC), but rather by “the people, represented by the Communist Party,” as stated by numerous Chinese

Communist and former Soviet Communist leaders. In other words, the “state,” or government, in countries like China and the former Soviet Union is owned and controlled by the Communist Party. This is why the highest title or position in authority in both the former USSR and the present-day PRC is that of “General Secretary of the Communist Party.” For example, Xi Jinping, the current President of the People’s Republic of China, is also the

General Secretary of the Communist Party of China (CPC). As General Secretary, Xi serves also as an ex officio member of the CPC Politburo

Standing Committee. Understanding the nature of the CPC’s politics is key to understanding the interlocking operation of the

Chinese government and its “state-owned enterprises.” If a business is owned by the state, and the Communist Party in turn owns the state then it

does not take much to logically deduce that the Communist Party of China thus owns such businesses or enterprises. The CPC and its key party members own any and all Chinese “state-owned” businesses and comprise the vast majority of China’s minority population of wealthy elites. The ramifications of treating Chinese state-owned enterprises equally to U.S. enterprises and firms are of high importance when considering that such an acquiescence would further serve the interests of the Communist

Party elites in China by giving them an unprecedented access to purchase U.S. businesses and properties. With the largest foreign currency reserves in the world, a reported $3.4 trillion, China would be capable of going on an extraordinary spending spree in the United States. Such a spending spree would have extraordinarily negative effects on our national independence and personal freedoms.

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