High-tech exports

During Monday's talks, the US asked China to standardize and regulate its government procurement measures at the local level to "de-link" its innovation policies from government procurement.

China stressed that many US firms have lost business opportunities and market share in China as a result of the US government imposing controls on high-tech exports to China.

"It is not fair for China and for US businesses," Chen told the media.

The US has imposed restrictions on more than 2,000 items, with mandatory requirements to clarify the end-user and end-use in China before US manufacturers can export such items to China, Chen explained.

The US has excluded China from its new exports license exception, dubbed the Strategic Trade Authorization, which has granted access to 164 countries.

China has stressed many times that its imports from the US are set to rise sharply and that bilateral trade will be more balanced if the invisible loss can be avoided by lifting the controls the US has put on high-tech exports to China.

National security

The US also questioned China's new national security review of foreign direct investment, which began in April.

Chen said China will make sure that its security review process is "open and transparent".

Beijing adopted the new security review regime to safeguard China's national security, he said, adding that China "looks at the US as a teacher" in developing national security systems.

China also asked the teacher to do the same: to make its security reviews of Chinese firms conducting business in the US transparent and fair.

The Committee on Foreign Investment in the US, a group headed by the Treasury Department with members from the defense and intelligence departments, conducts regular screenings of Chinese firms trying to expand into the US through mergers and acquisitions.

Chen said quite a few Chinese firms have failed to pass the committee's review. Two years ago, an electronic products supplier was told that it could acquire a small US electronics firm, but two years later, it was told to "withdraw".

While declining to name names so as not to affect these firms' businesses in the US, Chen said the committee has failed to divulge how it conducted its review in a transparent and fair manner.

Chen admitted that China lacks experience in carrying out its new security review regime.

Both nations should show flexibility and seal the agreement on a bilateral investment treaty, he said.

"China hopes to learn from the US experiences and lessons to enhance the environment for foreign investors," Chen said.