2. Investment

The participants noted that the dramatic growth of US foreign direct investment (FDI) in China since the commencement of China's reform and opening policies has brought enormous benefits to China and the United States. Chinese foreign direct investment in the United States, though small, is growing rapidly and also has the potential to bring enormous benefits to the United States and China. As in the area of trade, the participants noted that there remain many obstacles to harvesting the full potential of two-way FDI. The participants agreed both countries should set as their goal the development of a stable, free, and open bilateral investment environment. To this end, the participants endorsed the following views:

? The participants agreed that it is in the interests of both economies to expeditiously negotiate and conclude a bilateral investment treaty (BIT) that would result in the maximum removal of restrictions on two-way foreign investment. While participants conceded that they may have differences regarding the scope of a BIT, they agreed to advocate with their governments for the timely conclusion of such an agreement.

? Participants agreed to advocate for their governments to reduce significantly inbound FDI review and approval procedures and ensure that such procedures are applied equally to foreign and domestic companies.

? They also agreed that both governments should conduct national security and antitrust reviews with increased transparency and efficiency and to work to ensure that broader political factors do not impact consideration of inbound FDI from the other country under each country's FDI review process.

? Participants agreed to advocate for their governments to support Chinese and American businesses' cooperation on trade and investment in each other's market.

3. Market Competition

Participants noted that government policies, practices, and decisions that impact commercial activities should be made, to the maximum extent possible, on an equal basis with regard to the nature of ownership of the company in question, e.g. government-owned vs. private, and the nationality of the company. Participants agreed to advocate with their governments against the politicization of trade and investment. They further agreed that privately-owned, state-owned and state-invested enterprises should receive equal treatment and that each of their governments should not discriminate against companies from other countries based on nationality.

4. Innovation

Participants noted the critical role that innovation will play in the US and Chinese economies in the coming decades. They further noted that in the 21st century, innovation is increasingly a global, networked effort. They noted that promoting innovation is a high priority for enterprises and governments in both countries.

Participants agreed that both governments should adopt proactive policies and measures to encourage market-driven innovation and strengthen protection and enforcement of intellectual property rights.

Dialogue participants agreed to further explore common approaches to stem the rising trend of forced localization, coerced technology transfer, and unreasonably restrictive technology transfer policies around the world, including at the WTO and other multilateral institutions, and to make recommendations to their respective governments toward this end.

Participants agreed that though there is an important role for governments in promoting innovation, especially through funding of basic research, history has shown that the market-driven, open, and competition-based model of innovation is the most efficient and successful.

Participants agreed to oppose efforts to promote innovation through government policies or actions that discriminate against companies of the other country based on nationality.

In addition, participants voiced their strong support for the announcement by the two governments in April 2013 to establish a new working group on cybersecurity challenges and to present its findings at the July meeting of the US-China Strategic and Economic Dialogue in Washington, DC.