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U.S. lobby disappointed by slow progress towards China treaty

China's President Xi Jinping in Beijing, China, September 9, 2015 REUTERS/Lintao Zhang/Pool

By David Brunnstrom

WASHINGTON (Reuters) - The U.S. business lobby expressed disappointment on Monday at the pace of negotiations on a bilateral investment treaty with China and said it was important that President Xi Jinping address the growing concerns of U.S. firms when he visits the United States this week.

Last week, the U.S. Trade Representative's office said the United States and China had exchanged revised lists of sectors that would be off limits in an investment treaty but gave no details.

Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, said the progress had been "incremental, not substantial."

While he had not seen the Chinese list, he understood the number of sectors that remained off-limits to U.S. investment had gone down from about 80 to between 35 and 40.

"Typically when we negotiate bilateral investment treaties with other countries, we are talking about one piece of paper, not a thick document excluding these main sectors.

"There's still a long way to go here ... China has got to come much further with its offer."

Sunday's Washington Post quoted Zhang Xiangchen, China’s deputy representative for international trade, as saying that positive progress could be expected during Xi's visit, which will start with visits to tech firms in Seattle.

He declined to comment on when a deal might be reached, noting only that China’s entrance to the World Trade Organization took 15 years and that this treaty was “no less important or complex.”

Brilliant said it was important that both Xi and President Barack Obama renew their commitments to the treaty in their Washington meetings on Thursday and Friday and urge officials to move "with more speed and seriousness of purpose."

This was particularly important given the fragile state of the global economy, the slowdown in China, and growing distrust of Beijing's plans among U.S. businesses, especially those in banking, agriculture and technology, Brilliant said.

He said there were particular concerns about the threat of technology theft through hacking, as well as about China's proposed national security law and one that would restrict activities of non-governmental organizations - including business lobbies.

One area where the U.S. side hoped for progress was in biotechnology. Brilliant said there were hopes that China would agree to license seven biotech products, and there was also likely to be discussion on market access for U.S. pork and beef, although it was not clear if China would give ground on this.

(Reporting by David Brunnstrom; Editing by Cynthia Osterman)